Cryptocurrencies have kicked off a wave of change that is creating an internet of money that is becoming email to the traditional monetary system’s post office.
So says J.P. Thieriot, CEO of blockchain-based digital money platform Uphold, and he intends to ride that wave.
It’s an ambitious—to say the least—goal for the trading app company, which in September added the ability to trade fractional shares of 50 U.S.-based stocks to its list of 36 cryptocurrencies, 27 fiat currencies, four precious metals and—as of Dec. 1—tokenized carbon offset credits.
Led by Uphold, the Universal Protocol Alliance’s Universal Carbon token, UPCO2, is backed one to one by a set amount of carbon dioxide offset—one year-tonne of CO2.
Built on Ethereum’s ERC-20 standard, UPCO2 tokens are backed by Verified Carbon Units (VCUs) issued by Verra’s Verified Carbon Standard program. The voluntary greenhouse gas reduction group claims that 500 million tonnes of carbon dioxide and other greenhouse gasses have been eliminated by the 1,600 certified VCS programs. Uphold’s is linked to a rainforest protection project.
Aside from buying, holding and selling the UPCO2 tokens, holders can burn them to offset their own carbon footprint.
On the consumer side, Uphold has signed up about 1.5 million new customers this year, bringing its user total past 3 million, Thierot said.
Calling it “a platform for democratizing access to interesting investments,” he said Uphold’s goal is to make investing easy “through a non-pro trader, non-black backdrop-candle-graph interface. It’s meant to be intuitive, so that our mothers can use it.”
Uphold’s core business is “anything-to-anything payments.” That means not only can you buy bitcoin for dollars, you can buy Apple stock with gold. “And everything in one wallet that you can use in any country in the world,” he said. Thieriot explained:
“We don’t have trading pairs. If you want to go from physical gold into Apple stock, we price it as one hop. If you want to go from Tesla stock to Google stock, it’s one hop. You don’t go Tesla to dollars, dollars to Google—that’s two times your fees. And I don’t think anybody else in the world does this.”
Thanks to a debit card, you can also buy apples at the supermarket using your gold—which is actually stored in the Perth, Australia mint. And, he added, users have “everything in one wallet that you can use in any country in the world.”
On the business side, Thierot said, employers can pay their staff in gold—which is how he is taking his wages, albeit as an experiment.
For businesses, Uphold is an API that businesses can use as a platform for digital payments. Its largest user is the privacy-focused Brave browser, which uses a blockchain-based digital ad platform and has about 20 million active users. Another partner is content monetization platform Coil, which Ripple spun out in May.
Breaking central banking
Broadly, the goal of Uphold is to digitize payments and kick over the “legacy architecture” in which liquid money, stocks, commodities and everything else you own is stuck in separate silos controlled by different intermediaries like banks and brokers, Thierot said, adding:
“The monetary system as put forth by central banking and the government might be like the U.S. Postal Service, but when email comes around—which is to say, crypto, Bitcoin, an internet of money—then the importance and centrality of the U.S. Postal Service becomes rather diminished because people have so many choices and other ways to do it.”
That’s how he sees the payments market during what he calls “the fraying late stages of the 50-year experiment in central banking that started with the U.S. getting off the gold standard in ’71.”
And that was before the U.S.—like many other governments around the world—began printing dollars by the trillion to cover the costs of COVID-19.
“I don’t think there’s any magic that can prevent the effects of printing that much new money,” he said.
“The value of the dollar will go down relative to every hard asset, full stop, so there will be devaluation,” he predicted. “The dollar is relatively stronger than the rest, but in that boat—the dollar plus all other fiats versus say the value of an apartment in New York, a car, a boat, food, Bitcoin, gold—it’s going to look inflationary.”
Worst case scenario, Thieriot said, Americans will start to feel what it’s like to be an Argentine, noting that everything in his country is priced in U.S. dollars because they don’t trust the Argentine peso. “And an Argentine starts to feel what it’s like to be a Venezuelan and a Venezuelan starts to feel what it’s like to be Zimbabwean. It’s all a shift in that direction,” he added.
“I think thanks to technology, the monopoly of governments to dictate units of account and tight currency parameters… is sort of done, right? It’s just a new reality.”
But that new reality isn’t one that replaces dollars with bitcoins, said Thieriot.
“Even though Bitcoin has been the pioneer or the big revolution, it is not Bitcoin that best fits that mold,” he said. “Bitcoin is, I think, secure in the position of being digital gold.”
Which is to say, a store of value. That’s been getting a lot of support in the past few months, as a number of mainstream companies put assets into Bitcoin as a hedge against inflation cutting into the value of their dollars. That began with MicroStrategy, to the tune of $425 million, followed by Stone Ridge ($115 million) and payments firm Square ($50 million). Then PayPal jumped in, launching bitcoin, ether, litecoin and bitcoin cash trading on U.S. customer’s accounts. Next year, it should be available to all 346 million customers.
That said, it is “digital gold with a twist,” Thieriot said.
“People who buy gold are defensive and generally cynical and possibly libertarian, but they’re not buying gold because they think gold’s going to quote ‘moon’”—or skyrocket in price.
“People who buy Bitcoin absolutely think there’s a chance it’s going to moon,” he said. Therefore, they are “going to spend it as a last resort.”
Besides, Bitcoin has been mooning lately, breaking it’s all-time high on Nov. 30. You’ll note MicroStrategy’s $425 million investment in 38,250 BTC—as of September—is currently worth more than $725 million.