A recent promise by US Senate Leader Chuck Schumer to lift the federal cannabis ban may have implications for Bitcoin (BTC) and the entire cryptocurrency industry.
Schumer and other Democratic Senators Ron Weden and Corey Booker issued a joint statement February 1 stating that they intend to reform federal cannabis legislation. The statement noted the disproportionate impact of the war on drugs on people of color. He Said:
“The war on drugs was a war on people, especially of people of color. An end to the federal marijuana ban is needed to correct the flaws in this failed war and end decades of damage done to communities of color across the country.”
Even in states where cannabis is legal, pharmacy owners are still forced to operate outside the traditional banking industry. The federal ban so far has meant that most banks have not been willing to take the risks of dealing with cannabis stores, effectively forcing owners to run the cash register business.
Cryptocurrency and hemp, especially when it comes to legislation in the United States, has grown in the same decade. Both have traditionally faced the same difficulties in gaining public acceptance, whether from legislators and regulators or even the general public.
Perhaps not surprisingly, cryptocurrency projects stepped in to fill the void left by banks in the legal cannabis industry. In addition to the emergence of many marijuana-inspired cryptocurrency tokens and the advent of blockchain technology used to disrupt the supply chain from seed to sale, the emergence of cryptocurrency in the cannabis industry has also provided pharmacy owners with an alternative to cash payments and a way to store wealth.
But if cannabis was already legalized federally, what would happen to the growing relationship between weeds and cryptocurrencies? Will the cryptocurrency be banned from use?
Michael Wagner, CEO of Multichain Ventures, which provides blockchain payment solutions for the cannabis industry, told Cointelegraph that accrediting regular banks could eliminate the need for business owners to use cryptocurrency. Wagner said:
“In terms of the utility value of cryptocurrencies, which open up their traditional financial positions for these businesses, I admit that they reduce the appeal of blockchain-based solutions.”
However, the impact of such an incident is likely to be mitigated, says Wagner, who says the lack of legal clarity regarding cryptocurrency is making it difficult for cannabis users to join at the moment.
“From countless conversations with cannabis operators, I was convinced that the cryptocurrency was not widespread, despite the tensions in financial services today. The lack of clarity regarding the legitimacy of the cryptocurrency, as well as the understanding of the technology, creates a significant barrier. To enter. ”
Wagner said the drive to create a digital payment system for the cannabis industry, as Multichain Ventures worked with Nevada on piloting the blockchain, is an example of an attempt to overcome this barrier.
But regardless of the legal status of cannabis, according to Wagner, using cryptocurrency has advantages that go beyond just being a store of wealth.
Additionally, our internal thesis has been and continues to be that decentralized economic ecosystems provide significant value in their own right. In all possible ways. The process is faster and cheaper. Greater transparency. ”
Wagner says he supports conversations about legalizing cannabis and believes the cryptocurrency will work no matter what:
“I totally support expanding access to the cannabis trade through legislation, but I think we’ll find attractive uses for cryptocurrencies anyway.”
The global legal cannabis industry is estimated to be worth nearly $ 20 billion by 2020, even if it is isolated from COVID-19. In comparison, the value of cannabis sold on the black market is estimated to be more than 10 times higher.
Senators Schumer, Weiden, and Booker will publish a draft debate on reform by the start of 2021. Shares of many hemp have risen since the official announcement.