Crypto Fans Encouraged

After President Donald Trump signed legislation regulating stablecoin, players involved in the cryptocurrency space believe it could change the game. In recent years, Los Angeles businesses have shown support for cryptocurrencies by offering payment options in digital currencies such as bitcoin and ethereum. One specific cryptocurrency, stablecoin, recently received a vote of confidence when President Donald Trump signed into law the Genius Act, establishing the first federal regulatory framework for cryptocurrencies. Crypto market watchers like James Williams, an attorney specializing in cryptocurrency at Century City-based Manatt, Phelps & Phillips, called the law a gamechanger. “It removed uncertainty,” Williams said of the Genius Act. “It will bring clarity for main street retail users and businesses, not just the global financial elites. Merchants will now be able to accept stablecoin with peace of mind, knowing it is a U.S. regulated asset.” The law’s passage impacted the wider crypto market. The ether token of the ethereum network hit $3,795.40, its highest level for the year on July 20, shortly after the Genius Act was signed, according to Reuters. Bitcoin exchange-traded funds reached a record $1.18 billion last month, according to crypto trade journal CoinDesk. This signals growing acceptance of crypto, said Isaiah Douglass, managing director at Calabasas-based Swan Bitcoin, a bitcoin financial services firm. “This surge in accumulation underscores strategic adoption, not speculative hype,” Douglass said. He expects the Genius Act to boost the profile of other cryptocurrencies. “We see stablecoin and bitcoin operating in parallel for the foreseeable future. The U.S. government’s increasingly positive stance on both bitcoin and stablecoins bodes well for their global adoption in the latter half of this decade,” Douglass said. As the market evolves, a small group of Los Angeles entrepreneurs and business leaders have embraced cryptocurrency as a payment option. However, the number of Americans using cryptocurrencies remains relatively small. A Federal Reserve Bank survey found that 8% of American adults used cryptocurrency for investments and transactions in 2024. The cryptocurrency market cap has skyrocketed over the past nine years, growing from $7 billion in 2015 to $2.3 trillion in 2024, according to the U.S. Treasury Department. A January survey by Ernst & Young showed 59% of institutional investors plan to allocate more than 5% of their assets under management to cryptocurrencies. The Genius Act — Guiding and Establishing National Innovation for U.S. Stablecoins — mandates reserve requirements for stablecoins pegged to the U.S. dollar, making them less volatile than other cryptocurrencies. It also enforces strict marketing rules to protect consumers from fraud and requires stablecoin issuers to disclose their reserves monthly.

More Payment Options

Aaron Kirman, founder and CEO of luxury real estate agency Christie’s SoCal, recently launched a team of 10 agents specializing in crypto deals. Supported by about 20 consultants including lawyers and escrow agents, this team navigates the extra complexities of crypto transactions, which often bypass traditional banks. Kirman said Christie’s SoCal — based in Beverly Hills — is the only trophy home brokerage in Los Angeles offering to close deals with cryptocurrency. He was motivated by demand from high-net-worth clients. The team has been active for about 18 months, closing $200 million in crypto deals with another $50 million in escrow. Kirman predicts that 25% of future deals will be made in cryptocurrency. Volatility remains a concern. Crypto deals typically start with an agreed dollar price, then buyers match that amount in cryptocurrency. The agency has worked with bitcoin, ethereum, and Tether (USDT). “Buyers always want to close as fast as possible when a cryptocurrency is up,” Kirman said. “Crypto deals are shorter than others.” Bitcoin is also accepted as payment for residential and retail units by real estate company Caruso, which owns luxury properties such as The Grove and The Americana at Brand. In 2021, Rick Caruso said cryptocurrency would be used to buy goods and services at his malls, though retailer adoption remains unclear. “We envision a myriad of opportunities where we can better engage our guests and enhance their experience on our properties like introducing blockchain-enabled rewards and enabling cryptocurrency payments,” Caruso said.

‘Transformed into Mainstream’

Cryptocurrency is also making inroads at restaurants and retailers. In April, Beverly Hills-based Fat Brands Inc., parent company of Fatburger and Round Table Pizza, announced franchisees could pay royalty fees in bitcoin, said Thayer Wiederhorn, the company’s COO. “Over the years, bitcoin has transformed into a mainstream asset and, as a company, we see great value in expanding our forms of payments for our franchisees, especially for our international partners, who make up over 20% of our portfolio,” Wiederhorn said. “We look forward to utilizing bitcoin as an efficient tool for streamlining and simplifying the payment process and are excited to be at the forefront of this evolution in embracing bitcoin as it continues to grow in popularity.” Fat Brands did not respond to further comment requests. Conversely, cannabis dispensaries have been slower to adopt cryptocurrency, said Nicholas Lee, founder of Bored N Stone dispensary in Koreatown. Despite cannabis businesses’ historically strained relationship with banks due to federal illegality, many dispensaries hesitate to use crypto because of volatility, security concerns, and the learning curve of crypto wallets. Lee, however, is an advocate. “The hesitation is not understanding the benefits of crypto; it gives people more control, privacy, opportunity and access, all while bypassing traditional financial systems,” Lee wrote. “We remain optimistic. Better user experience, clearer regulation, and more stable solutions, such as stablecoin, could push adoption forward.”

Frequently Asked Questions (FAQ)

Impact of the Genius Act

Q: What is the significance of the Genius Act for the crypto market? A: The Genius Act is significant because it establishes the first federal regulatory framework for cryptocurrencies, specifically stablecoins. This legislation is expected to remove uncertainty and bring clarity to the market, making it easier for mainstream retail users and businesses to engage with regulated stablecoin assets. Q: How does the Genius Act regulate stablecoins? A: The Act mandates reserve requirements for stablecoins pegged to the U.S. dollar, aiming to reduce volatility. It also enforces strict marketing rules to protect consumers from fraud and requires stablecoin issuers to disclose their reserves monthly.

Cryptocurrency Adoption in Los Angeles

Q: Which Los Angeles businesses are embracing cryptocurrency payments? A: Businesses in Los Angeles, such as luxury real estate agency Christie’s SoCal and real estate company Caruso, are incorporating cryptocurrency as a payment option. Fat Brands Inc., the parent company of Fatburger and Round Table Pizza, also allows franchisees to pay royalty fees in bitcoin. Q: What is the outlook for cryptocurrency adoption in the real estate sector? A: Aaron Kirman of Christie’s SoCal predicts that 25% of future deals in the luxury real estate market will be made in cryptocurrency, based on demand from high-net-worth clients.

General Cryptocurrency Market Trends

Q: What has been the recent performance of major cryptocurrencies like Ether and Bitcoin? A: Following the passage of the Genius Act, Ether's token hit a year-high of $3,795.40. Bitcoin exchange-traded funds also reached a record $1.18 billion, signaling growing market acceptance. Q: What percentage of American adults use cryptocurrency? A: According to a Federal Reserve Bank survey, 8% of American adults used cryptocurrency for investments and transactions in 2024. Q: How has the overall cryptocurrency market cap grown? A: The cryptocurrency market cap has grown significantly from $7 billion in 2015 to $2.3 trillion in 2024, according to the U.S. Treasury Department. Q: What is the sentiment among institutional investors regarding cryptocurrency? A: A survey by Ernst & Young indicated that 59% of institutional investors plan to allocate more than 5% of their assets under management to cryptocurrencies.

Challenges and Opportunities for Crypto Adoption

Q: What are the main concerns hindering broader cryptocurrency adoption, particularly for businesses like cannabis dispensaries? A: Hesitation among some businesses, such as cannabis dispensaries, stems from concerns about volatility, security, and the learning curve associated with crypto wallets. Q: What factors could drive increased cryptocurrency adoption? A: Improved user experience, clearer regulation, and more stable solutions like stablecoins are expected to push adoption forward.

Crypto Market AI's Take

The recent passage of the Genius Act marks a significant milestone in the cryptocurrency landscape, offering much-needed regulatory clarity for stablecoins. This development is particularly encouraging for the broader adoption of digital assets, aligning with the growing integration of crypto payments seen in sectors like luxury real estate and retail. At Crypto Market AI, we leverage advanced AI and machine learning to navigate these evolving markets. Our platform provides AI-powered trading bots designed to execute strategies with precision and efficiency, alongside in-depth market analysis to help users understand and capitalize on these shifts. The increasing institutional interest and clear regulatory pathways suggest a maturing market, where sophisticated tools and reliable intelligence are key to success.

Crypto Fans Encouraged - Los Angeles Business Journal