How accepting cryptocurrencies can increase value for your organization.
This is a short overview of the current crypto payments state, and also how cryptocurrencies can help leverage your business.
The current global cryptocurrency market cap at the moment that this article was written is $1.08 Trillion (source), and according to Coindesk, it is estimated that the current value will triple by the year 2030.
Globally, the use of Central Bank Digital Currency (CBDCs), together with new crypto-friendly regulations and policies, is fomenting economic value creation through new trade agreements, or just as an alternative to inflated legal tenders.
Even though a lot of cryptocurrencies are very volatile, in some cases they have proved to be a very good alternative to national tenders.
Let’s take, for example Argentina, where the adoption of stablecoins and cryptocurrencies are increasing thanks to the volatility and inflation of their own legal tender. If we compare the value from the Argentine peso, some cryptocurrencies and the dollar, we will have a very interesting outcome:
1 USD → 183 Argentine Peso
1 USD → 371 Argentine Blue dollars
1 USD → 0.999 USDT
1 Bitcoin → 22885.9 USD
1 ETH → 1632.69 USD
As result of this, Citizens from Argentina, invest in cryptocurrencies, and its adoption is increasing rapidly, around 31% of Argentina’s small retail crypto transaction volume comes from the stablecoin sales. Its adoption rate is around 13% in the last years.
We have similar cases in some countries in some other regions: Nigeria, South Africa, and Kenya lead the pack in crypto adoption in Africa. Besides Argentina, Brazil is also a leader in Latin America.
There are other cases where one of the main reasons for crypto ownership is diversification of one own’s portfolio instead. At the time this article was written, there were 23.6 million Americans owning cryptocurrencies.
In EU, several neobanks are implementing Cryptocurrencies, and the use of stablecoins is getting more popular. The regulatory and supervisory framework MiCA (Markets in Crypto-Assets Regulation) is the is expected to enter into force in 2024. Which shows the acceptance among countries in the European Union. According to Chainalysis, Europe has one of the world’s largest crypto economy, collecting $1 trillion in the past, or 25% of all crypto activity worldwide.
At the institutional level, cryptocurrencies are also increasing in popularity among financial institutions such as Neobanks, remittance players and credit card networks. Banks and financial institutions that haven’t yet implemented it, could consider it as a multi-rail which improves their payment infrastructure. They could definitely benefit from the technology itself.
Visa, for example, now supports more than 30 crypto currencies through its core network infrastructure.
Crypto payments providers, such as: Slash, Coinbase, CoinPayments, and Bitpay are also facilitating acceptance of crypto currencies for merchants and helping to propose to benefit from crypto, they are constantly increasing their network support for crypto settlement.
There are a series of companies that are trying to improve the merchant — customer experience when performing crypto payments, to purchasing products or services in online or offline channels.
So, what are the advantages of start accepting cryptocurrencies as payment in your business?
- Access to a new customer segment:
- Asia has approximately 160 million crypto users
- Europe has approximately 38 million crypto users
- Africa has approximately 32 million crypto users
- North has America Approximately 28 million crypto users.
- South has America Approximately 24 million crypto users.
- Oceania — has approximately 1 million crypto users
- It is another easy method for users with no credit card nor a bank account to access funds and savings.
According to the world bank, 24% of the worldwide population is not reported as having bank accounts ownership. This report shows a major increase from 51% in 2011 to 76% in 2021.
2. Crypto currencies are accepted worldwide; coins are not limited by regions.
Merchants can receive payments in their preferred currency worldwide. The fees shall remain equal for each user independent of their geolocation.
3. Cryptocurrencies offers quick settlements.
Compared with credit card payments, crypto payments have faster settlement cycles, they can be completed in minutes, independent of holidays, weekends, strikes and can be cheaper due to lower transaction costs.
4. No chargebacks
All fees are covered in one transaction.
5. Lower fees
Crypto payment providers such as Slash, do not charge transaction fees to merchants. Paypal instead, charges from 1.90% + fixed fee to a 3.49% + fixed fee
Merchant currently accepting cryptocurrencies.
According to Coinnmap, there are 30,457 identified merchants accepting cryptocurrencies across the globe. As stablecoins and other cryptocurrencies emerge into the mainstream, your business can surely gain a competitive advantage by accepting them.
There are of course some major organizations, brands and chains that are already accepting cryptocurrencies worldwide. For example:
Wikipedia, Microsoft, AT&T A, Burger King (Germany and Venezuela), KFC Canada, Tesla, Starbucks Whole Foods, Newegg, Twitch.
Some risks to take into consideration:
Once the cryptocurrency payment goes through, it will be permanent. This can be a problem for small businesses, because there is an intolerance for mistakes. This will also require trust in the wallet which by mistakenly received the funds.
Regulations and taxes
Regulations and taxes vary across countries and crypto payments providers are trying to keep compliant, with regulations. We still recommend merchants to do some research beforehand. Or collaborate together with their legal and tax advisor.
Takeaways
Accepting cryptocurrencies as payment methods can help organizations to improve the current payment infrastructure, it opens the door to a new customer segment, it is efficient and, in some case, cheaper than current solutions. It is recommended to do research about applicable regulations for your organization, depending on the countries that you are operating.
Other sources:
https://explodingtopics.com/blog/number-of-cryptocurrencies
https://www.zippia.com/advice/how-many-businesses-accept-bitcoin/
[Finder Cryptocurrency Adoption Index | finder.com](https://www.finder.com/finder-cryptocurrency-adoption-index#:~:text=The US ranks 19th out of 26 countries,is lower than the global average of 15%25.)
PwC Global Crypto Regulation Report 2023 — Amended to include the BCBS rules
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Written by
Passionate about tech & web3.
Contact: t.mateo@slash.vision
Edited by
Global BD at Slash. In web3 since 2017 and inspired by innovative
blockchain tech.
Contact: issei@slash.vision
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