Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Plunging into Payments with Plutus Tap & Pay and Pluton (PLU)

Britain’s Plutus Tap & Pay and Pluton (PLU) could be the best blockchain platform and Ethereum token you have never heard of.

To explain, Plutus is following the radical and disruptive strategy of devoting its resources to building a product used by real people in the real world. The product is Plutus Tap & Pay which can supposedly work at 40 million stores worldwide.

Notably, Plutus Tap & Pay users can pay with the Euro (EUR) the world’s second-most fiat currency used by 337.144 million people in the Eurozone. In addition, Plutus allows payment with the British pound, a major currency ignored by most blockchain developers.

Will Plutus Tap & Pay become a dollar alternative?

However, Plutus Tap & Pay will not make payment in the world’s most popular fiat currency the U.S. Dollar. On the other hand, Plutus Tap & Pay could attract those who are uncomfortable with the dollar.

Strangely, many Americans could find Plutus Tap & Pay and the Pluton (PLU) attractive. To clarify, lots of Americans are skeptical of their nation’s economy and its future.

For example, former U.S. Treasury Secretary and economist Robert Reich writes the USA is on the edge of an economic precipice in The Guardian. Disturbingly, Reich thinks America is not generating enough economic activity to sustain its economy. In fact, Reich thinks a crisis as catastrophic as the Great Depression of the 1930s is looming.

Under those circumstances, a cryptocurrency payment option not tied to the US dollar could be popular. A “Black Swan event” that could boost Pluton (PLU) is the devaluation of the U.S. dollar. Interestingly, dollar devaluation could occur if the U.S. faces a debt crisis as Reich predicts.

What is Plutus Tap & Pay?

The best way to think of Plutus Tap & Pay is a PayPal or Apple Pay for cryptocurrency.

Like PayPal, and Google Pay, Plutus Tap & Pay is an iPhone and Android app that connects point-of-sale (POS) devices to a payments platform. However, Plutus & Pay allows people to pay in Pluton (PLU) ERC tokens, Bitcoin (BTC), pound sterling, and the Euro.

Importantly, such mobile payments platforms are big business. For instance, the most popular payments platform; Tencent Holdings’ WeChat Pay had 600 million users in August 2017. Conversely, PayPal (NASDAQ: PYPL) the third most popular mobile payments platform had 210 million users in August 2017, Statista calculates.

Interestingly, Google Pay the former Android Pay only had 24 million members in August 2017. Plus Apple Pay only had 87 million users in August 2017.

Is Plutus Tap & Pay the Ant Financial or PayPal of Cryptocurrency?

Additionally, payments platforms can be worth a lot of money. For example, Ant Financial; the owner of the second-most popular mobile payments platform Alipay was valued at $150 billion in May 2018.

Moreover, Reuters estimates Ant’s valuation grew from $60 billion in April 2016 to $150 million in April 2018. In detail, the privately held Ant Financial is the Alibaba (NYSE: BABA) spinoff that operates that company’s financial services solutions.

Ant Financial CEO Eric Jing claims Alipay had 700 million active users in September 2018, reports. Impressively Jing claims Alipay use grew by 200 million between September 2017 and September 2018.

In addition, Statista records revenues of $3.683 billion for PayPal Holdings (NASDAQ: PYPL) for 3rd Quarter 2018. Plus, PayPal’s revenues grew from $3.239 billion in 3rd Quarter 2107 to $3.683 billion a year later.

Hence, Plutus is positioning itself in a growing industry with tremendous moneymaking potential. In addition, Plutus is in a good position to raise lots of money in the capital markets. Notably, Ant Financial raised $10 billion from investors in May 2018, Reuters reports.

The Secret weapon at Plutus Tap & Pay: Legality

Strangely, Plutus’s secret weapon in the payment wars could be its willingness to comply with laws and regulations.

Unlike some blockchain developers, the Plutus team hired an international law firm and asked if Plutus Tap & Pay and Pluton (PLU) are legal. Hence, Plutus is trying to avoid expensive and embarrassing legal entanglements.

For instance, attorneys at Plutus’s law firm Bird & Bird wrote an interesting legal opinion on Pluton (PLU)’s legal status that could have far-reaching implications for cryptocurrency. Notably, Bird & Bird concludes cryptocurrency is not money.

Plutus Tap & Pay’s Attorneys conclude “Cryptocurrency is Not Money”

“In summary, PLU are loyalty points similar to cash-back points from your grocery store, or air-miles when you travel. In this sense, they qualify as utility tokens in every category,” Bird & Bird concludes.

Instead of a currency, a Pluton (PLU) is a “non-monetary reward token” similar to frequent flier miles. Therefore, Plutus regards Plutons as rewards tokens and not cash.

This conclusion is not legally-binding because it is merely the opinion of Bird & Bird attorneys. However, some judge somewhere could pick on Bird & Bird’s Pluton opinion and use it as the basis of a legal ruling.

Importantly, this ruling could hold throughout the English-speaking world and the former British Empire where nations use the common law. Under the common law, judges can make law by ruling on cases and legality. Hence, the Pluton opinion could determine the legal status of cryptocurrency in the United States, India, Australia, Canada, Pakistan, the United Kingdom, Bangladesh, and much of Africa.

Will Plutus Tap & Pay Dominate Cryptocurrency Payments?

Therefore, Plutus could be well ahead of the curve in cryptocurrency legality. By branding the Plutons (PLU) as rewards tokens, Plutus could avoid cryptocurrency restrictions like those in India.

More importantly, Plutus could avoid conflicts with central banks and giant payment processors like Visa (NYSE: V) and MasterCard (NYSE: MA). For instance, the Indian government is considering a ban on cryptocurrency, CCN reports. Under those circumstances, Plutus could get around the cryptocurrency ban by claiming the Pluton (PLU) is not cryptocurrency.

In addition, both Visa and MasterCard pulled the plug on cryptocurrency debit cards last year. Notably, Plutus’s MasterCard was shut down by MasterCard last year.

Plutus Tap & Pay’s big bet on Rewards Points

To explain, companies need permission to connect their cards to Visa and MasterCard’s payments systems. However, Visa or MasterCard can withdraw permission.

On the other hand, Visa or MasterCard could allow a debit card that treats a cryptocurrency as rewards points. Essentially, Plutus is betting that a big credit-card processor will allow a card that uses an Ethereum or EOS based token as a “reward point.”

However, there is no guarantee either Visa or MasterCard will accept this argument. If a credit-card company accepts Plutus and Bird & Bird’s reasoning, Plutus could be worth a lot of money.

An interesting question to ask is how will the financial regulators deal with a “rewards token” that is also an investment? Notably, Plutons (PLU) trade on the cryptocurrency markets. In fact, Plutus is even planning a PlutusDEX (decentralized exchange) for cryptocurrency transactions. 

Does Mr. Market like Plutus Tap & Pay and Pluton (PLU)?

Another fascinating question to ask is how will Mr. Market value a token that functions as rewards points?

Currently, Mr. Market shows little love for Pluton (PLU). For instance, Pluton (PLU) had a Market Capitalization of $489,626 and a 24-Hour Market Volume of $9,542 on 25 December 2018.

Tellingly, CoinMarketCap named Pluton the 892nd ranked cryptocurrency on that day. However, Pluton (PLU) had a good Coin Price of 57.6¢ on Christmas Day 2018.

The Pluton achieved that Coin Price with a Circulating Supply of 850,000 PLU and a Total Supply of 20 million PLUs. They can create no new Plutons because there is a Maximum Supply of 20 million PLUs.

Why Plutus Tap & Pay could be valuable

Hence, speculators think little of Pluton (PLU) and Plutus. However, I think Plutus Tap & Pay could have a lot of value because it is being accepted by the European Union’s Single Euro Payments Area (SEPA).

To explain, SEPA is an EU wide system for the simplification of bank transfers. Thus Plutus Tap & Pay could become the standard European system for cryptocurrency transfers. On the other hand, legal effects from Brexit could push Plutus out of Europe.

To clarify, I think Plutus could be a valuable payments company but Plutons (PLU) might have little value as a cryptocurrency. To explain, Plutus Tap & Pay could make money the old-fashioned way by charging transactions fees. However, that might not boost Plutons because speculators will not consider them a cryptocurrency.

Plutus Tap & Pay could become a valuable Fintech company

Plutus will have value as a fintech company because it is trying to solve the practical problems associated with cryptocurrency. In particular, Plutus is trying to deal with the legal problems associated with cryptocurrency payment.

Thus, Plutus Tap & Pay has a bright future but Pluton’s future is questionable. Watch Plutus carefully because it is showing how to adapt cryptocurrency payments for widespread use in highly developed countries. That expertise could be one of the most valuable attributes in the world of cryptocurrency.