One sign the cryptocurrency industry is maturing is the creation of products and services that make up a normal financial system now happening here, things such as ETFs and even ATMs. This activity has to be tracked and audited but before now there has been little movement to do so for those transacting in cryptocurrencies.
Gil Hildebrand is filling the void. Mr. Hildebrand is one founder of Gilded, a blockchain accounting startup that has been billed as QuickBooks for crypto. Formed following an Ethereum meetup in New Orleans in 2017, Gilded Finance allows business to account for crypto and NFTs on their books.
Mr. Hildebrand’s early career prepared him for this moment. A cofounder of Squidoo, Mr. Hildebrand said they paid half the money they made back to developers. While this was before Bitcoin, his experience prepared him for the challenges he is now overcoming at Gilded.
“Paying people electronically and internationally back then was a challenge,” Mr. Hildebrand recalled. “I couldn’t find a good solution.”
While the Internet democratized access to information, it did little for the transfer of value, Mr. Hildebrand said. But after Squidoo was acquired, he began to get involved with cryptocurrencies and soon saw a problem. While the technology brings significant returns, your ROI will take a hit because you struggle to integrate with usual business tools and processes.
Don’t believe what you’ve heard about everyone sitting on their crypto, for it’s beginning to circulate, Mr. Hildebrand said. Many of Gilded Finance’s early clients were blockchain industry natives who were comfortable within the ecosystem. They pay their employees and complete everyday transactions with it.
That is beginning to spread to non-blockchain companies too. Over the past few weeks Gilded Finance is hearing from more companies wishing to offer crypto payroll options. Bookkeeping companies want to help their business clients accept cryptocurrencies and freelance sites want to pay international talent with it. International marketplaces want to pay their vendors with crypto because it’s easier than PayPal.
While much of the clamor is about Bitcoin, it’s a terrible payment method, Mr. Hildebrand said. It’s highly volatile with significant transaction fees. Stablecoins will calm matters down.
There’s several pivotal shifts Mr. Hildebrand is watching for which should propel the industry forward. American banks should soon be offering stablecoins, which will be a decisive factor. Further business tool integrations will occur and tax reform should address cyrptocurrency not simply as property but more based on its transactional nature. Companies like Visa will make stablecoin payments much more common.
What is clear is the current financial system is not designed for this new reality and needs to change fast. Wire transfers can take days or even longer to reach their destination based on how many banks your money has to flow through. Where that money is at any given time isn’t clear either.
“The real issue is you have no transparency in the process,” Hr Hildebrand said. “You see the money leaving your account but you never actually know if the recipient got it unless they tell you. You can talk about the speed and cost benefits for crypto but I think the transparency part of it is one of the biggest things.”
The new system will be so much more efficient and it will unlock tremendous value, he reasons. Begin with real-time auditing, which will drive efficiency, increase trust and create much more abundance.
That system will be heavy on tokenization too, Mr. Hildebrand believes.
“In talking to companies, we’re getting to the place where everything will be tokenized in some way, NFTs will represent everything,” he predicted. “It’s going to be interesting because it’s going to create a new world of liquidity where people can more easily and more efficiently trade things and it’s going to create a ton of new transparency.
“People who are prepared for that and expecting that will benefit the most from that.”
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