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Once again it is being reported that eBay is both to accept cryptocurrencies as a form of payment and has also started to allow the buying and selling of NFTs in 2021. Meanwhile Amazon, whilst it has not confirmed its acceptance of cryptocurrencies or Digital Assets, is clearly researching this since it has been developing a digital currency and blockchain roadmap.
For a while, Shopify, Canada’s retail giant and answer to Amazon, has enabled the merchants using its FinTech platform to accept cryptocurrencies. Shopify has even devised a simple guide for merchants to follow, explaining the advantages of using cryptos and how to get started so that it can offer cryptos as a payment option for their customers. The most valuable FinTech firm in Europe, Klarna (with over 90million customers), is rumoured to be preparing for an IPO in 2022 and has been a veritable leader when it comes to Buy Now Pay Later (BNPL). However, for now, it’s chief marketing officer, David Sandström, has said that Klarna “has no plans offer customers the option to pay using cryptocurrencies”. Sandström has gone on to say “Credit card companies have made an astounding amount of money by essentially cheating and taking advantage of people with bad terms and conditions, high rates and extremely disadvantageous interests. Roughly 70% of American millennials don’t have a credit card because they fear them more than they dread death, according to some reports.”
Furthermore, the main credit card providers such as Visa and Mastercard have shown a much more positive attitude towards cryptocurrencies. In an interview with Barron’s, Vasant Prabhu, Visa’s vice chairman and chief financial officer, said: “What we can do is be the bridge between the crypto economy and the fiat economy.” Indeed, both Mastercard and Visa now offer a wide range of debit cards that deal in crypto and can use their respective network of merchants globally. This is helping to onboard more people with digital wallets, currently reported to number almost 300 million people, with potentially 1 billion digital wallet holders by the end of 2022. Presumably, this excludes 20% of the population of China who have access to the Chinese CBDC have a digital wallet.
As we see more jurisdictions issuing their own CBDC payment platforms, there will potentially be the need for banks and FinTech firms worldwide to upgrade their processes and systems in order to accept digital currencies. Awareness of crypto and digital currencies is certainly growing and being fuelled by marketing and advertising campaigns, such as the 2022 Superbowl which attracted 112 million viewers. A 30-second advert cost $7m, a 27% increase on last year with the adverts being run by eToro, Coinbase and Crypto.com to promote their various crypto and digital assets products and services. During the Superbowl itself, FTX gave away $1million of Bitcoin as part of its marketing mix!
Certain jurisdictions are looking to overhaul their legislation and regulations, as was highlighted last November by Australia’s Treasurer, Josh Frydenberg: “For consumers, these changes will establish a regulatory framework to underpin their growing use of crypto assets and clarify the treatment of new payment methods.” A common trait is that FinTech firms are making it simpler for users to buy and sell goods and services digitally, often bypassing the bank’s existing payments infrastructure. It is worth remembering the basic technology behind cryptocurrencies is likely to be the preferred choice for many CBDCs, and also for cash-backed stablecoins. Interestingly, such cash-backed stablecoins could prove to be popular for global corporations as a way to improve their ESG credentials and reduce the potential risk of leaving money on deposit at a bank as well as being exposed to the systemic risks of fractional banking.
But this is an article for another day!