Alchemy Pay: Bridging Fiat Money and Cryptocurrency Is Bold, but Questionable

Advertisement

Alchemy Pay (ACH-USD) has a bold vision to bridge the gap between fiat and cryptocurrency economies by developing the world’s first hybrid payment system and supporting blockchain adoption. But is this great idea based on innovation? Or is it wishful thinking?

An iPhone with the Alchemy Pay (ACH) logo on the screen.
Source: Shutterstock/David Esser

I would argue that the gap between the traditional banking system and fiat money and the cryptocurrency market cannot be closed. There is an abyss separating these worlds. Recent history proves that most times, theory is different from reality. After all, what is the best case for arguments other than real facts?

Is Alchemy Pay a good investment? Investors should be aware of the risks, such as a highly volatile price. I would suggest investors perform their own research and never invest more than the amount they can afford to lose.

The latest price of Alchemy Pay as of Mar. 3 was $0.04723. Back in August 2021, it spiked to 15 cents. Later on, in early Jan. 2022, Alchemy Pay was trading near nine cents. Having lost nearly 50% year-to-date shows its high level of riskiness.

Alchemy Pay: The Great Idea of Innovation

Alchemy Pay enables digital payments to have a large network of merchants and blockchain partners. “Alchemy Pay is an integrated fiat and cryptocurrency gateway solutions provider, powering seamless crypto and fiat acceptance for merchant networks, developers, and financial institutions.”

The goal of Alchemy Pay is to drive the wider adoption of blockchain technology focusing on ease, safety, and uninterrupted, quick accessibility to a crypto-fiat hybrid ecosystem. Alchemy Pay is an ERC-20 token used for creating and issuing smart contracts on the Ethereum (ETH-USD) blockchain.

Alchemy Pay envisions participants in both fiat and crypto ecosystems “to achieve fast, secure, convenient, flexible and scalable global payment solutions, based on the decentralized smart contracts, second-layer scaling solutions, on-chain analytics and consensus mechanisms of blockchain technology.”

Can this idea actually work?

Providing customer-to-business and business-to-business payments using the ACH-USD token could gain traction. The Alchemy Pay ecosystem includes banks, exchanges, merchants, wallets, and decentralized finance infrastructure.

Why The Bridge Is too Complicated to Succeed

Life often gives us practical examples about unexpected events, conditions, and testing economic theories. The recent war in Ukraine is unprecedented and shocking. Russia invaded Ukraine and financial markets are shocked. Oil prices have surged and the crypto market has soared.

The idea of considering the cryptocurrency market as a “safe haven” amid the war in Ukraine is a very bad joke. But it is the best argument to support my thesis that the bridge between fiat money and the cryptocurrency market is not going to work.

Sanctions against Russia were taken by many counties, including the U.S. and European countries. The decision to cut off Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) means that transferring money and capital to and from Russia will be very difficult. The Russian market has become un-investable.

The Ukraine invasion is not just a war with victims, but it is also an economic war. Russia is a key player in oil and natural gas markets. The financial assets of Russian oligarchs have been frozen elsewhere in the world.

How did cryptocurrency react to this war? By sending donations to Ukraine to support its army. This is a very good thing to do in theory. But I wonder how many scams will come about because of this.

As the traditional financial system has put the Russian economy under siege, the cryptocurrency market did the exact opposite. It is said that Russian people have already turned to buy cryptocurrencies to avoid the global financial sanctions.

Some reputable crypto exchanges were asked to suspend accounts owned by Russians, otherwise, they could be closed.

You cannot coordinate global financial sanctions against the Russian economy from the traditional banking system and offer a loophole via the cryptocurrency market. This bridge is unrealistic, not sustainable, and not feasible.

I believe the idea of Alchemy Pay is bold and innovative. I wonder about its success though. I am very pessimistic. Life has just taught us a lesson about why the gap between fiat money and the cryptocurrency market is large and hard to close.

On the date of publication, Stavros Georgiadis, CFA  did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/03/alchemy-pay-bridging-fiat-money-and-cryptocurrency-is-bold-but-questionable/.

©2024 InvestorPlace Media, LLC