First introduced in 2008 with Bitcoin, crypto-currencies are now numerous. Operating on a peer-to-peer basis without the need for an intermediary such as an account-holding bank, crypto-currencies intrigue as much as they worry the payment industry, interested in the possibilities they can bring but also held back by the difficulty of regulating them. After 13 years of existence, new concepts are trying to integrate these crypto-currencies into retail and consumer payment habits, even though they are considered as investment vehicles, but rarely as payment instruments given their extreme volatility.
[/et_pb_text][et_pb_image src=”https://www.galitt.com/wp-content/uploads/2021/04/Cryptomonnaies-et-commerce.jpg” title_text=”Crypto-currencies and retail” align=”center” _builder_version=”4.6.6″ _module_preset=”default” hover_enabled=”0″ sticky_enabled=”0″][/et_pb_image][et_pb_text _builder_version=”4.6.6″ _module_preset=”default”]Major companies now accept crypto-currencies
[/et_pb_text][et_pb_text _builder_version=”4.6.6″ _module_preset=”default”]So some companies have decided to take the gamble of accepting crypto-currencies as payment, or almost.
The e-commerce giant Rakuten has set up a system for accepting these crypto-currencies, which you can exchange for “tokens” issued by the site, called Rakuten Cash. Crypto-currencies do not allow you to buy any product on the site, but they do allow you to feed your Rakuten wallet, and then benefit from some specific services included in the proposals. In this case, crypto-currencies do not completely replace traditional means of payment, their use being limited to certain services. Nevertheless, this wallet system allows for the gradual integration of cryptos in the payment of certain products, while testing the advantages and potential limitations of such a program.
Uber has also announced that it is interested in crypto-currencies. The transport and home delivery service behemoth seems to be open to accepting crypto-currencies for the payment of its services.
PayPal, for its part, bought the Israeli startup Curv for $200 million, with the aim of intensifying its presence in active cryptos. Since then, the payment giant has moreover made official the possibility offered to all its users to pay the 29 million merchants of its network in crypto-currencies.
Finally, the car manufacturer Tesla has taken the next step: accepting bitcoins for payment of its electric vehicle. While this feature may seem anecdotal, it remains very symbolic of the recent democratization of crypto-currencies.
Finally, let’s mention that in Switzerland, AXA has just opened the possibility for its policyholders to pay their insurance premiums in bitcoins.
It is undeniable that these crypto-currencies are becoming more and more talked about and are attracting the interest of merchants, businesses and consumers. However, there are still important elements holding back the implementation of crypto-currencies, which stem from the tokenization of highly volatile virtual assets.
[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”4.6.6″ _module_preset=”default” custom_padding=”0px|||||” custom_margin=”25px|auto||auto||”][et_pb_column type=”4_4″ _builder_version=”4.6.6″ _module_preset=”default”][et_pb_text _builder_version=”4.6.6″ _module_preset=”default”]Limitations and risks of crypto-currencies in retail
[/et_pb_text][et_pb_text _builder_version=”4.6.6″ _module_preset=”default” min_height=”430px”]Although every effort is being made by the aforementioned players to make crypto-currencies viable, many doubts remain about the long-term use of crypto-assets as a means of payment.
The fundamental limitation of this use stems from the volatility of cryptos. They are subject to a price, which can fluctuate from one extreme to another in a very short time, as we are seeing at the moment. We can take the recent example of Bitcoin, which following its ban by the central bank of Turkey went from its historical record of 64,800 dollars to almost 60,000 dollars in just two days. Nothing can be taken for granted when investing in a crypto-currency, as there are so many fluctuations in price and demand. A state decision like Turkey’s can single-handedly impact the price of a crypto-currency very strongly. In practice, this volatility makes their use as a payment instrument unattractive. Moreover, as long as payment networks do not accept them in their infrastructures, each transaction systematically requires a conversion, thus intermediaries and additional costs. Visa and Mastercard are making progress on the subject, but are beginning to accept stablecoins and not cryptos, precisely because they offer guarantees of stability.
Another obstacle to the democratization of crypto-currencies is their lack of regulation. Operating in P2P (Peer to Peer), at their origin they were not subject to any regulation by central banks or governments. As usage preceded regulation, it took time for the regulatory authorities to address the issue. In Europe, last October, a draft framework for crypto-assets was created through a proposed regulation called MiCa (Markets in Crypto-assets).
But it will still take time for crypto-currencies to be properly regulated and via harmonized regulation.
Finally, the virtual and dematerialized nature of these crypto-assets makes them vulnerable to all types of hacking and technical incidents that could impact their price. Even if digital security is progressing and adapting, it will take time to limit as much as possible the errors and risks linked to these virtual assets.
Crypto-currencies are therefore a subject of questioning and intrigue for the world of retail. They are both innovative and attractive, but in their current state, they are still a cause for concern. It is certain that we will hear more about them, notably from the large companies mentioned in the article. We will have to watch carefully the different regulations that will appear progressively in order to glimpse the future of the use of crypto-currencies in our daily life.
[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version=”4.6.6″ _module_preset=”default”][et_pb_column type=”4_4″ _builder_version=”4.6.6″ _module_preset=”default”][et_pb_blog fullwidth=”off” posts_number=”3″ use_manual_excerpt=”off” excerpt_length=”0″ show_author=”off” show_categories=”off” show_excerpt=”off” show_pagination=”off” _builder_version=”4.6.6″ _module_preset=”default” custom_margin=”20px||||false|false” border_width_all=”0px” box_shadow_style=”preset1″ box_shadow_blur=”14px” box_shadow_spread=”-5px” box_shadow_color=”rgba(0,0,0,0.15)” locked=”off”][/et_pb_blog][/et_pb_column][/et_pb_row][/et_pb_section]
