Could blockchain solve the cannabis industry's problems with banking services?

Posted 4 years ago

The cannabis industry has developed very rapidly in recent years. We can observe the legalization of this product in many countries. Financial investors consider this market to be up-and-coming, which is why many are investing personal funds in new projects. Despite the opportunity to purchase the product legally in many specialized institutions, cash is available transaction way to customers nowadays. Many banks do not cooperate with cannabis distributors or offer unfavorable terms for financial transactions. 

Such trends significantly hamper the development of the marijuana market. But there is one non-standard solution, and this is blockchain. The cryptocurrency market is more developed than cannabis. Thanks to digital money, people will be able to buy recreational hemp and not use cash. It will simplify the purchase process. The use of cryptocurrency probably can positively affect the availability of hemp for patients and ordinary buyers. The blockchain market can also benefit from such a symbiosis. Digital money will have the status of legal tender, and exchange rates will be more stable.

There are many cryptocurrency companies associated with the hemp industry. They try helping to popularize the product on the world stage and to get marijuana legally. Thanks to these trends, companies gain recognition and popularity among the target audience. Ultimately, both markets can benefit in the long run. 

• Jibbit GmbH. The company is currently developing several applications for the cannabis industry. It is a marketplace for accessories - Jibbit Marketplace; Cannabis delivery service - Jibbit Runner and Jibbit Doc. All applications are developed using the blockchain industry.

• Paragoncoin. The organizers of this payment project intend to modernize the medicinal cannabis industry, improving its reputation.

• Cannasos. It develops solutions for the hemp industry in North America and around the world.

• Stablecoins. Provide the financial services medical marijuana companies need without requiring a bank account

• Posabit, Potcoin, Cannabis coin

And there are more and more companies. So why does cannabis need cryptocurrency? The answer is simple: cashless payments. Even in the United States, not all banks want to work with cannabis producers and distributors. Banking services are too expensive. Now imagine the whole difficulty of selling cannabis abroad. Cannabis sale is illegal in many countries. Accordingly, you cannot use banking services to purchase goods.

Blockchain: the main difference between banking payment

Blockchain can solve many industry challenges. Companies get the opportunity for transparent financial reporting. It will meet all the formal requirements of the business. Cryptocurrency makes it possible to make non-cash payment of medical cannabis and various goods on this basis. Companies will have the opportunity to act in the legal field. Here are just a few of the real benefits of blockchain industry:

• Legal and safe purchase of cannabis;

• Secure transactions and legal reporting;

• Fast deals and reduced use of cash;

• Controlled blockchain banking (best solution).

Blockchain is associated with decentralization and anonymity. All transactions conducted through a secure channel, which means that third parties will not be able to intervene in the process. This industry technology will significantly reduce the cost of servicing the entire industry. Manufacturing companies mitigate their risks. Since many dispensaries denied access to banking services, cryptocurrency will become a real alternative.

Cryptocurrency and secured transaction

Another beneficial aspect of blockchain technology is transaction protection. Thanks to the chain of blocks, information is transferred between decentralized computers. It means that - cannot steal your money. Such a payment format can be trendy in the future. No one wants to lose their money when buying cannabis. Modern technologies will help citizens to purchase this product safely and not worry about the transaction is incomplete.

Due to the speed of information processing, payment will be carried out much faster than using a Visa or MasterCard bank card. Cryptocurrency will receive the status of legal tender in the marijuana industry. It is essential for both the blockchain and the marijuana industry. Each market participant will be able to receive the prospect of the growth of their business. At the same time, the state and official sellers of this product will be able to sell marijuana exclusively to people with the appropriate permission.

Contrary to the general belief that blockchain technology is entirely anonymous, companies can track participants in the transaction chain. Imagine a database of people with the appropriate permission to purchase this product. They will be able to make legal purchases that can control. At the same time, third-party people will not be able to access personal information of buyers. It is beneficial for the development of both markets.

The Future Of Cannabis & Digital Currency

At the moment, the cannabis industry is experiencing a massive round of popularity. Many companies increase their capitalization and are focused on working with cryptocurrency services. Many people in business create projects to support the cannabis market with digital payment. But not everything is so rosy. A lot of people considers cryptocurrency a fraud, and fund managers say this is the hottest topic.

It is similar to the industry investing in the production of marijuana in the United States - they also thrive, despite obvious risks. However, in recent months, the fear of regulation has reduced investor enthusiasm for both types of assets. Once virtual currencies and hemp were side by side on the darknet, but now these are assets behind which it is customary to see endless growth prospects — the most obvious risks associated with regulation.

A few states tried to ban cryptocurrencies directly, but regulators from different countries issued various kinds of warnings regarding ICOs. Thus, risky and volatile new tokens like Paragon negatively affected the value of the first cryptocurrency payment and altcoins. That’s a risky business.

Yes, the cannabis market industry is growing amid a wave of legalization in the United States, but it is still illegal at the federal level, and politicians give conflicting signals. Thus, when you combine cryptocurrency, and marijuana in one asset, the risks associated with regulation begin to go wild.

However, this is not the main threat - first of all, you should be afraid of the traditional enemy of any market: excess supply and lack of demand. Today, there are already more than 800 cryptocurrencies, and even more, are in development. The amount of practical use of digital industry has not changed, although the number of transactions has increased by 50%.

Shortly, we will all be able to find out how real the fears will be, and whether a cryptocurrency will be able to legalize non-cash transactions. You can be among the first to learn about all the changes in the cannabis industry. To do this, you should subscribe to the newsletter. We also recommend that you read other news.