Crypto’s Mainstream Moment: Bridging the gap between Crypto and Fiat

Payments

3 min read

Crypto has entered an era of mass adoption, with innovations like limitless assets and digital tokens positioned to revolutionize financial services for consumers and businesses alike.

Crypto has entered an era of mass adoption, with innovations like limitless assets and digital tokens positioned to revolutionize financial services for consumers and businesses alike.

In one of our recent surveys, we found that 76% of merchants said they were seriously considering taking on a digital currency this year. Already, many progressive organizations are accepting digital currencies across industries, including Wikipedia, Expedia, and Twitch. Recently, our CEO, Guillaume Pousaz, spoke to industry insiders to provide insight on crypto’s normalization and what that means for businesses and customers. 




Mass adoption relies on a better user experience

It may feel like crypto is everywhere, but industry leaders see today’s adoption levels as just the beginning. Changpeng “CZ” Zhao, CEO, Binance, flags that the crypto space is still occupied by early adopters. His site, Binance.com, is the world’s largest crypto exchange, yet his customer base still skews overwhelmingly young and male. “We still need more user-friendly wallets, as well as better customer service, to increase customer adoption,” Changpeng Zhao says. It’s a point that rings true for fellow industry insider Sam Bankman-Fried, CEO, FTX, who thinks crypto needs to hugely improve both its self-hosted wallets and its non-centralised exchanges, pointing out that “we have no absolutely beautiful user experiences yet”. 

As well as a better UX, Bankman-Fried suggests a dramatic reduction in blockchain fees can accelerate usage, stating, “People can’t be paying $25 in transfer fees for purchasing a $5 cup of coffee.” He sees the next wave of adoption as a leap of faith - pointing out that both the customer and the merchant need to be excited about crypto, and be willing to take the first steps together. 

One of the ways this path is smoothed is through companies such as Visa and Checkout.com, whose products help bridge the gap between fiat and cryptocurrencies. Cuy Sheffield, Head of Crypto, Visa, says, “70 million merchants accept Visa, and we want customers to be able to use this, for Visa to be the bridge.” 

Addressing environmental impact and volatility concerns

Cryptocurrencies are often thought of as bad for the environment. But taking a broader view shows this isn’t strictly accurate - when compared against fiat currency such as USD, crypto isn’t materially more environmentally unfriendly. As Checkout.com’s Guillaume Pousaz highlighted: “Supporting the US dollar is environmentally unfriendly.”

Equally, we need to delineate between proof of work protocols and proof of stake protocols. Whilst proof of work protocols are environmentally unfriendly, proof of stake protocols (which are much more energy efficient) are the future of crypto tokens. In our recent panel discussion, CZ of Binance noted that “Bitcoin POW network is already energy efficient”.

Volatility is often brought up when arguing against further crypto adoption. But in conversation, both FTX’s Sam Bankman-Fried and CZ said they see this as a short-term issue. 

“Volatility will inevitably die down,” Bankman-Fried said. He argues that once we have a clearer idea of what crypto coin will be worth long term, this volatility will naturally diminish. CZ sees today’s volatility as corresponding to crypto’s total market cap, saying, “Crypto’s volatility is not so high when compared to other similar sized markets, such as Tesla stock.” 

The role of NFTs, culture, and a new era of ecommerce

Cuy Sheffield, Head of Crypto, Visa, believes that NFTs are ushering in a new era of ecommerce. “Crypto addresses will become the next shipping addresses- we will be shipping digital art to a digital address in the future.” He believes that NFTs went a long way in driving interest in crypto, increasing awareness of the space, and making crypto “cool and cultural”.

“I used to think NFTs were a niche thing - until I saw the pipeline for Binance’s NFT platform - no major IP owner is left out. Everyone wants to issue NFTs!” CZ states, happily pointing out that this huge market potential is an exciting opportunity for content creators to monetize their work. 

If NFTs were the on-board for new customers’ interest in crypto, it was interesting that FTX wasn’t going to let pass them by. They have recently won the naming rights to the entertainment venue currently known as American Airlines Arena, home to the Miami Heat, and their CEO Bankman-Fried promises that there’s “lots more to come!” Certainly, crypto’s mainstream cultural significance has well and truly arrived. 

How should merchants prepare for crypto?

Companies need to be ready to innovate and keep up with consumer demand in order to fully embrace the opportunities offered by crypto. Looking to the future, CZ wants all big companies to issue their own crypto coin, pointing out that they already have a stable business and an inbuilt large user base. He believes this would not only be a great introduction to crypto, but also a “market-driven validation of this coin.” Sheffield urges large companies to think about payout adoption, which is a necessary first step before merchants will be able to think about accepting crypto payments from customers. This has been a focus of the partnership between Checkout.com and Visa, by which the Visa Direct product can unlock these kind of payouts. Meanwhile, Bankman-Fried reassures those looking at the space to take it a step at a time: “No one knows all the answers from day one - the goal is to learn.”

Learn more about how Checkout.com is empowering crypto businesses globally at www.checkout.com/crypto and watch the whole panel discussion on YouTube.

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Written on May 21, 2021 by

Checkout.com

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We process your personal data in accordance with Checkout.com's privacy policy. By subscribing, you consent to us sharing updates with you.

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The Checkout.com team