Finance

What obstacles must payment giants overcome to adopt cryptocurrency?

As we all know, there is a high probability that cryptocurrency will continue to exist. They have become an asset class with a market value of more than $1.7 trillion.

However, despite the increasing adoption rate, the gap between the cryptocurrency and the fiat currency world is still some distance away. Two central problems hinder the adoption of cryptocurrencies.

The first problem is that although cryptocurrency and blockchain applications are typical, it is not easy for companies in the fiat currency world to include cryptocurrency in their services.

Revolut is a good example. Although they have the resources to introduce cryptocurrency-related services, they are still launching cryptocurrency derivative services after several years of hard work. They only launched a cryptocurrency withdrawal facility earlier this year.

Similarly, it is difficult for cryptocurrency projects to accept payment in fiat currency. There is no solution for such projects to make local/cross-border payments.

Blockchain technology is perfect and gaining demand and recognition from companies outside the cryptocurrency world.

Those companies that prioritize work internally, find suitable blockchain marketing agencies to build blockchain infrastructure for them will undoubtedly still gain first-mover advantages in certain areas. Thus, over time, we will see the worlds of cryptocurrency and traditional legal currency synchronize.

Which payment market giants are ready to accept Bitcoin?

Big companies such as Microsoft, Coca-Cola, PayPal, Expedia, and Starbucks have accepted Bitcoin as a payment method. However, this is only in specific regions and forms. In addition, Amazon may join them soon.

Banking organizations such as Goldman Sachs and JPMorgan Chase are entering the cryptocurrency field to provide related services to their customers. In addition, companies such as Tesla, MassMutual, and Square have also invested heavily in Bitcoin. Cryptocurrency is arousing widespread interest from corporate participants.

In other words, Bitcoin is unlikely to be the accepted choice for global payment market giants in their business.

Stablecoins and central bank digital currencies are more likely to gain favor in the next few years because cryptocurrencies such as BTC and ETH are still bound to experience volatility.

The idea here is to improve the trading scenario, not increase the additional complexity of dealing with asset fluctuations “in the transaction.” Of course, this will be achieved more realistically through the use of stable coins and CBDC.

In the next few years, we look forward to launching the first comprehensive CBDC. Many countries around the world have been working hard to study this particular approach.

China’s DCEP (also often referred to as “digital renminbi”) will probably be the first country to achieve a full-scale launch. The Central Bank of India also recently announced a preliminary implementation model for a digital currency, which may be launched before the end of 2021.

In addition, in 2022, we will start to see large companies use stable coins for settlement. For example, Visa announced support for USDC transactions earlier this year. By 2022, we may see the company make further progress in this direction.

Benefits of payment versatility

The most significant advantage of cryptocurrency is not its price but its versatility as a settlement tool. As a result, the demand for fast and efficient international payments is now very high.

Today’s payment platforms and banks charge high fees for international transactions. In addition, these transfers may take a considerable amount of time to execute.

Integrating cryptocurrency into payments can lead to cheaper and faster transactions, and enhance cross-border remittances, making it more accessible.

The need for a solution that allows companies to switch between fiat currency and cryptocurrency effectively is crucial.

If we can create an infrastructure that allows companies to make local and cross-border payments quickly and at a low cost, it will become the bridge needed to facilitate the large-scale adoption of cryptocurrencies for payments between enterprises.

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