Clever marketing or sign of real adoption?

Andrey Diyakonov is Chief Commercial Officer at Choise.coma MetaFi (CeFi/DeFi) ecosystem based on Crypterium CeFi solutions and the Charism DeFi protocol.
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Earlier this year, all the digital asset news was about the ongoing crypto winter, the bankruptcies of lenders and other projects, and major Black Swan events such as Axie Infinity‘s Ronin bridge hack or the collapse of Terra’s UST algorithmic stablecoin.

Surprisingly, a significant change can be observed in recent months. Despite cryptocurrency prices staying close to current market bottoms, there has been some positive media coverage of the industry recently.

The reason for the latter is quite straightforward. Over the past few months, a growing number of prominent businesses and government entities have begun adopting digital assets for payments.

Accelerating business and government crypto adoption

In August, during Gucci expanded the list of supported digital assets by ApeCoin and the luxury resort chain Soneva began accepting large coins at its premises in the Maldives and Thailand, Oxford City has become the first non-league football club to integrate crypto for matchday payments.

Also, businesses have expanded crypto payment coverage in Australia and Argentina. Residents of the latter can now use a prepaid card achieved through a collaboration between Binance and MasterCard to settle transactions with merchants via cryptocurrency. Meanwhile, Aussies can now buy fuel and other goods with their digital assets on them On the runits 175 premises.

At the same time, governments are also increasingly realizing crypto-payments’ potential use cases and benefits. Of course, central bank digital currencies (CBDCs) continue to play a large role in governments’ use of cryptocurrency, especially if we consider how close China is to launching its digital yuan (e-CNY). While visitors and residents can use e-CNY to buy subway tickets in Ningbo and Beijing, bus fares can be covered with the government digital resource in Guangzhou.

Clever Marketing or Real Sign of Crypto Adoption?

Big brands like Gucci, Balenciagaand Tag Heuer joins the ranks of companies that Microsoft, PlayStation, AT&Tand Subway accepting crypto is definitely good news for the industry.

But before we imagine that bitcoin (BTC) and other major cryptocurrencies are “going to the moon”, we should discuss whether this is a signal of reality, non-hoax about adoption or just a marketing ploy by brands.

Fortunately, the previous statement seems to hold true.

Whether they like it or not, large firms are adopting cryptocurrency for payments to meet growing consumer demand. In Gucci’s case, the luxury brand likely decided to integrate ApeCoin due to strong customer interest in the non-fungible tokens (NFT) of the popular Bored Ape Yacht Club (BAYC) project, where top celebrities such as Eminem and Snoop Dogg are actively involved.

Furthermore, with an estimated 320 million crypto users worldwide, many consumers have realized the benefits of crypto payments. Compared to conventional forms of payment, digital assets are cheaper and faster to transfer due to the lack of intermediaries in the transactions. At the same time, while users have direct ownership of their funds (assuming they didn’t mess with their private keys) with non-custodial wallets, they do not need to use a bank account, credit card or other financial institution services to settle their payments.

For businesses, the benefits of crypto payments are even more obvious. Compared to traditional providers who typically charge between 1.5% and 3.5% to process credit card transactions, a recent report revealed that accepting digital assets with a capable processor only costs businesses about 1%.

The savings in fees and transaction speed provide an excellent opportunity for merchants to reduce their bottom line. Furthermore, while they can target crypto-native prospects more effectively, they face significantly fewer risks of unfriendly behavior, viz. fraudulent chargebacks, with transactions driven by digital assets.

Who Will Take the Lead in Crypto Adoption?

In the coming months, I expect more luxury brands, especially those actively involved in the NFT and metaverse sectors, to follow in Gucci’s footsteps and adopt crypto payments. Also, as demand among merchants grows, it will likely provide yet another reason for payment giants such as MasterCard, Visaand PayPal to introduce new or expand their existing digital asset offerings to meet business demand.

At the same time, as the upcoming metaverses of tech companies like Meta and Microsoft comes one step closer to launch, we may witness an acceleration of crypto adoption in this field as well, where said assets can be used as means of payment in virtual worlds. Now, how and if – if at all – Whether the new efforts will be future-proofed and regulation-resistant remains to be seen. The meta still hasn’t fully recovered from the Libra setback. How decentralized and peer-to-peer (P2P) these infrastructures are is another point of uncertainty.

Next year may also see some new government initiatives aimed at harnessing the benefits of crypto payments in a similar way, spanning the continents, from Iran through African states to Argentina’s Mendoza province. However, I believe that all these efforts will be slowed down by the focus that may be diverted to CBDC development.

For that reason, I expect businesses to take the lead in the adoption of crypto payments in the coming months – or at least until China completes the nationwide rollout of the digital yuan, paving the way for millions of new crypto users.

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Learn more:
– The metro in the major Chinese city is starting to accept digital Yuan payments
– Chinese parents use digital CNY “smart contracts” to pay for after-school classes

– El Salvador leader Bukele Calm as media brand ‘Bitcoin Experiment’ a ‘Failure’
– Binance partners with Nigerian government to launch Dubai-style digital economic zone

– Digital assets can become a ‘permanent feature’ in finance, claims Singapore’s central bank
– Adoption is gaining momentum in LATM with the Brazilian central bank’s DeFi Project & Developments in Argentina

– US Crypto ATM provider Bitcoin Depot goes public as part of merger deal
– Ripio launches Visa Bitcoin Cashback Crypto Card in Brazil