A company called stockpile is selling stocks in the form of gift cards at Target.
Putting it in gift card form with a bit of design (good UX oft missing from traditional finance) seems to make it accessible to kids and lower middle classes. What seems clever about this? It seems like the play here is to find a new distribution channel (retail) to find a new market.
According to the tweet thread, you pay a $5 commission on $20 trade for the plastic gift cards. That’s highway robbery, but you’re paying for the education.
They mostly provide stocks, but also some ETFs. There is a single exposure to Bitcoin through Grayscale’s Bitcoin Trust (search GBTC)
That should open up markets to people who don’t need to know anything about crypto, and it’s another onboarding ramp.
Taking it further—Technically, you should be able to create new financial instruments with smart contracts that you can sell at Target in the form of a card. The private keys for an address is generated and held in the card itself.
Operationally, I can see how it hard it would be.
1/ Making gift cards should probably not be too hard. But secure cards might take some engineering. Are there off the shelf chip cards you can flash software onto? Seems unlikely for security reasons.
2/ Most big retailers (Target, Costco, Best Buy) are not going to want to carry crypto-based products out of FUD. Maybe Walmart would, as they have a Labs division that’s already looking into blockchain for supply chain.
3/ Even if they do, you’d have to spend $ on making end cap displays. Also, because they own distribution, they can make more onerous demands, like your product has to sell well or they won’t give you good shelf space.
Or for the remaining inventory, you have to promise to buy it back. They have high costs too, such as making advertising flyers and training employees on these new products.
4/ Regulatory restrictions probably would require KYC for these gift card crypto.
Is there a second order effect that makes this an interesting business or technical breakthrough if this works?
I currently don’t see either, but the cultural implications might be interesting. Once people figure out these things have value, they can do a bunch of OTC trades on the streets for any type of behavior normally deemed unacceptable.
Even if regulations require KYC to move the money, having a physical representation of the money is enough for people to trade it around, without having to actually move it. It’s much like how the banks don’t actually move the stock certificates around, but just change a ledger on who owns it at the end of every day.