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    The President of FTX in the United States shows how cryptocurrency might benefit marijuana businesses.

    The banking problems of Marijuana-Related Businesses (MRB) is real. Currently, 34 states within the US allow either recreational or medical usage of cannabis. Even though possession and distribution are still illegal, the MRB industry’s estimated worth is at $16 billion. This number is expected to reach $57 billion by 2027.

    Yet, only 30% of the MRBs have a bank account. The majority of the businesses are effectively underbanked, and according to FTX US’s president Brett Harrison, crypto can help them out. In a recent Twitter thread, Harrison described the reasons why MRBs are underbanked and described how crypto can be applied to provide an effective solution.

    The banking problems of Marijuana-Related Businesses (MRB) is real. Currently, 34 states within the US allow either recreational or medical usage of cannabis. Even though possession and distribution are still illegal, the MRB industry’s estimated worth is at $16 billion. This number is expected to reach $57 billion by 2027.

    Yet, only 30% of the MRBs have a bank account. The majority of the businesses are effectively underbanked, and according to FTX US’s president Brett Harrison, crypto can help them out. In a recent Twitter thread, Harrison described the reasons why MRBs are underbanked and described how crypto can be applied to provide an effective solution.

    Finally, even if MRBs are able to obtain local bank accounts they are still not properly banked. Harris says that their own banks and other issuing banks often deny access to point of sale banking. In other words, even the banked MRBs don’t have access to the use of major credit or debit cards, ACH etc.

    As a result of the above reasons, the majority of MRBs are only able to accept cash which requires them to hold substantive amounts as well. As cash stockpiles accumulate at dispensaries, crime risk increases and creates a major burden on law enforcement.

    Solution

    Harris argues that crypto can be the solution to this predicament.

    First of all, crypto exchanges also provide depository services as the banks do. Moreover, crypto exchanges’ services have lower fees, provide access to payment rails and offer a wider array of payment options.

    Secondly, stablecoins could help stabilize the cumulative capital of MRBs. Stablecoins do not risk unexpected value losses and can facilitate instant settlements away from cash. This way, cash piles would disappear and crime risk would diminish. In addition, MRBs can take advantage of the sophisticated cybersecurity services offered by crypto exchange platforms.

    Finally, addressing the lawmakers, Harris mentions the benefits of the state-wide legalization of cannabis. In addition to making MRBs’ lives easier, it would allow taxation and create a considerable additional income for the state. His tweet says:
    “State legalization of cannabis is an effective tool for generating tax revenue, and when paired with pardon programs an create new economic opportunities for those who have been disproportionately disadvantaged by drug sentencing laws.”
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