Is Crypto Payment the abandoned child still?

"Crypto payments are gradually but steadily gaining popularity and inevitably becoming part of a multi-polar payments' landscape. Let's take a look.

Among all the discussions around blockchain innovation, it often gets forgotten that payments were the first use case, famously documented in the exchange of 10,000 Bitcoins for 2 Papa John's pizzas in 2010.

Since then, thousands of cryptocurrencies have been created but one thing remains unchanged: a cryptocurrency is, by definition, a payment method, created as a digital alternative to traditional money.

A few reasons stand behind crypto payments' potential:

• The absence of trusted third parties like banks or card networks

• Increased efficiency resulting in reduced transaction costs

• Transparency combined with enhanced privacyy

• A global network almost not limited by borders

Most popular use cases:

• Remittances & money transfer

• Payroll & social benefits

• Cross-border payments for SMEs

• Merchant acceptance

When we talk about crypto payments becoming mainstream the latter is by far at the tip of the spear, with developments across 3 main levels:

1. Merchants and big brands (i.e. Newegg, Starbucks, Twitch) accepting crypto as a means of payment.

2. Payment providers (i.e. Shopify, Paypal) integrating crypto payments into their platforms. Stripe's move to bring back crypto payments after a pause of 6 years citing ""real utility"" has made big headlines.

3. Visa and Mastercard crypto card offerings (credit, debit, prepaid) that not only allow customers to pay for goods and services, but also permit to convert crypto to fiat and withdraw funds in fiat.

At the same time regulation is catching up with various initiatives around the globe, building exactly on the above momentum as an explicit sign of crypto's evolutionary path. The best example is the EU's MiCA (Markets in Crypto-assets) regulation that wants to not only build a clear legal framework for crypto assets but also to address issues such as customer & investor protection, financial crime, market manipulation and fair competition.

One pattern comes out as a clear outcome from these developments:

The strong interconnection between crypto and traditional finance.

Unlike what many believe, crypto's success is being built - step by step - as a reliable enhancement to existing financial infrastructure. Which, in turn, has created the need for companies that act as efficient crypto-to-fiat gateways, bridging the gap between the two worlds. Estonian-licensed CryptoProcessing.com by CoinsPaid is a good example of such a crypto ecosystem provider.

In an increasingly versatile digital payments arena, the offering of cryptocurrencies has become a tool of choice and diversification rather than one of endorsement. And with around 1% crypto penetration in the real economy, we are just beginning to scratch the surface of crypto payments' potential.

Guest post of Panag."

Author

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