It seems every day there is a new nation allowing for the use of cryptocurrencies. El Salvador has become the first country to make Bitcoin legal tender; Singapore has granted regulatory consent to a cryptocurrency exchange for the first time, and Germany is planning to allow institutional funds to invest in crypto assets. Cryptocurrency adoption has experienced an exponential surge, nearly doubling within the first 6 months of this year alone. According to Nasdaq, crypto owners increased from 100 million at the beginning of 2021, to 221 million by the end of June
As the popularity around crypto rises, nations cannot fall behind in the race to make digital assets a reality. This raises the question of how this development will affect our future lives?
The crypto impact on the business world
Although cryptocurrencies have been met with considerable apprehension for many years, organisations are now recognising the many benefits and opportunities they offer.
At the most fundamental level, cryptocurrencies do not need the existing banking system to operate. Without the need for an intermediary, payments can be executed more quickly and at a lower cost. Another major benefit of using digital assets as payment is their stable value across borders: five Bitcoin are worth the same amount in France, as in South Africa or Dubai.
For businesses this benefit opens new markets and geographies that were previously out of reach using the conventional fiat currency.
Many subscribers to crypto are also attracted to the security aspects that regaining power over transactions brings them. While banks are legacy custodians of data, high-profile breaches demonstrate that they are not infallible and are subject to leakages. For example, in 2014, JP Morgan Chase reported a data breach that affected seven million small businesses and 76 households.
Globally, more than 15,000 businesses now accept Bitcoin, according to one estimate from late 2020. While crypto’s adoption at the institutional level is currently undergoing much scrutiny and is finding its place alongside existing regulatory systems, what is clear is that businesses can no longer ignore the building traction. It is this traction at the institutional level that will trickle down to crypto’s adoption by consumers.
The crypto impact on retail customer experiences
More often than not, changes made at the institutional level pave the way for future adoption at the B2C level. When it comes to the potential for individual consumers to pay using cryptocurrencies, adoption has already been quietly picking up pace. Microsoft has been accepting Bitcoin for use in its online Xbox Store since 2014, Starbucks began accepting Bitcoin in 2020 and Amazon plans to accept Bitcoin payments by the end of the year and introduce its own crypto coin in 2022. This traction is thanks to the many benefits that paying with cryptocurrencies offers consumers.
We are all aware that we can face hefty fees for transactions with our usual fiat currencies. However, with crypto, additional charges are relatively negligible. Paying with crypto also brings to bear the benefits of the underlying blockchain network, based on decentralisation. This offers complete certainty that ‘what you see is what I see’, as well as superior levels of security. This transparency and assurance is difficult to find with traditional currencies.
Some of the most progressive fintech companies are paving the way to empower merchants to accommodate growing appetite for crypto payments. They can provide software that allows merchants to accept payments in cryptocurrencies, both on in-store payment terminals and in webshops. Paying for goods and services using cryptocurrencies can in fact be quick, risk-free, and as simple as paying with a bank card. If integrated into the existing payment infrastructure, the roll-out is smooth and efficient on a large scale.
For instance, Salamantex partnered with Concardis to enable merchants to accept cryptocurrencies at the Point-of-Sale terminals throughout Austria. With more and more merchants and acquirers realising the potential of accepting cryptocurrencies for goods and services, this option will become more and more readily available.
This is only the beginning
When you consider an estimated 42 million people worldwide now hold Bitcoin, the shift to being able to pay for goods with digital assets is a natural evolution.
At the retail level, the software solutions are already available and tested. Crypto adoption is becoming a mainstream reality. Ultimately, these solutions will continue to disrupt existing structures and rapidly grow in the world of finance. The dial is turning on moving cryptocurrencies from wary scepticism to excitement around a new alternative to the fiat currency we use every day.
By René Pomassl, CEO of Salamantex