Cryptocurrency payments are here to stay. There is no stopping it now, not even the recent market drop can halt their expansion. From peer-to-peer transactions in the emerging markets to big institutional crypto moves in the USA and EU, researches show that the world is on a fast track toward global crypto payments adoption.
From peer-to-peer to institutional adoption
There are nearly 300 million crypto users from all over the world who are pushing to bring crypto payments into our everyday lives and the number is predicted to hit 1 billion by the end of 2022. According to Crypto.com, the global crypto population has increased by 178% in 2021, rising from 106 million in January to 295 million in December.
While the expansion of the crypto space is undeniable, growing remarkably by over 2300% since 2019 and over 881% in 2021, the actual global crypto adoption is being driven on two different levels. The first one is peer-to-peer (P2P) transactions and the second one is the business and institutional implementation.
Many third-world countries and emerging markets face significant currency devaluation and often limit the amount of the national currency that residents can move out of the country. By buying cryptocurrency on P2P platforms residents are able to preserve their savings and carry out international transactions. In situations like this, cryptocurrency can help people gain financial freedom. In Lebanon, Argentina, and Venezuela, Bitcoin and other cryptocurrencies have gained significant popularity due to rampant hyperinflation. People from Ukraine and the Russian Federation have benefited from P2P platforms to send or receive funds in the midst of the ongoing war and the banking limitations that it imposed. Countries like El Salvador and the Central African Republic have already set bitcoin as one of their official currencies to open up new opportunities for their residents.
Institutional and business adoption
On the contrary, developed countries have been witnessing the expansion of crypto payments through institutional and business adoption. Mainstream companies across multiple industries took interest in cryptocurrency and blockchain in 2021. Powerhouses, like Tesla, Mastercard, and Visa, already made their first steps toward cryptocurrency payments. There is a long list of companies that offer direct or indirect crypto payments but here are some of the ones that stand out the most: Microsoft, PayPal, Overstock, Whole Foods, Etsy, Starbucks, Newegg, Home Depot, Rakuten, Twitch, CheapAir.com, AMC Theatres, AT&T, Dish network, and Travala.
Every time that big global corporations hint about getting involved in crypto the adoption numbers surge significantly. Some experts speculate that in the latter half of this year corporations like Amazon, who recently shared a job post for a “digital currency and blockchain product lead,” could step into the crypto market which would drive the adoption rate through the roof and make an enormous contribution to the global credibility of crypto payments.
Merchants’ views on crypto payments
Recently, Deloitte conducted an interesting study on US merchants. It showed that almost two-thirds of surveyed merchants felt that their customers have a significant interest in using digital payment methods, and expect the consumer interest to increase over the next year. They believe that the overall interest in digitally native solutions is significant, especially among younger generations, and feel that retailers who will fail to embrace this trend will run the risk of being left behind and losing out on profits. Around 85% of surveyed merchants expect that digital currency payments will be used among suppliers in their industry in five years, which is why more than 85% of surveyed organizations are giving high priority to enabling cryptocurrency payments.
The wheels are in motion
Despite the recent market crash, cryptocurrency adoption continues to skyrocket on all levels of usage which clearly shows that cryptocurrency is a truly global phenomenon.
While at the moment the majority of people don’t think about using crypto for their everyday purchases, the rising number of retailers and big institutions accepting crypto payments might change that landscape in the future. Clear regulatory frameworks will contribute to the safety and popularity of this new payment method as it will attract investors and make these funds less appealing to criminals.
Cryptocurrencies are now spreading beyond the retail industry and are being widely adopted by various institutions, including the financial sector. In the United States, Wall Street, Chicago Mercantile Exchange, and Goldman Sachs have already dipped their toes into the crypto market, offering different limited crypto trading services. European countries have focused on the legal framework (MiCA), which is expected to come into effect in 2023. Multiple governments are developing plans for their own security tokens, i.e. digital forms of traditional securities.
It’s hard to say how the crypto space will evolve in the future, especially taking into account governmental approaches to developing their own digital forms of assets. The world clearly sees the benefits of blockchain and crypto, providing a transparent, permissionless, and safe option to create your own financial freedom which transcends governments and borders. Crypto payments will fuel business growth on a global scale and enable individuals from all over the world to participate in the global market.
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