10 Apr More bumps in the road for Bitcoin’s acceptance as payment
We’ve seen some major changes for Bitcoin in the past year.
In the middle of March 2020, at the start of the pandemic, Bitcoin saw a significant low of just under $5,000 in line with the stock market crashing.
Like the stock market, Bitcoin saw a huge rebound possibly fuelled by stimulus cheques and concerns over a potential weakening of the US dollar combined with inflation.
The cryptocurrency broke it’s previous 2017 record of $19,000 this past November. It steadily climbed upwards, breaking price records to over $40,000 in January 2021.
Bitcoin is now trading at $58,000 USD. It continues to be in our headlines, gaining more traction with big investment names like Ray Dalio and Mark Cuban. Smooth sailing right?
Volatility aside, there have been two peculiar recent “bumps”, if you will on the road for Bitcoin’s potential for mass acceptance as a form of payment.
Paypals New Feature
The first bump in Bitcoin’s road to mass use as currency is Paypal’s announcement that it will be rolling out Checkout with Crypto.
This new Paypal feature would appear to benefit cryptocurrencies as it allows Paypal users to buy goods and services using crypto including Bitcoin.
Unfortunately, the new feature benefits Paypal’s status as a pioneer in fintech leading the path but it does not actually benefit cryptocurrencies as a form of payment.
The way Checkout with Crypto actually functions is a workaround that converts crypto-to-fiat for merchant settlement.
Paypal has essentially packaged crypto-to-fiat conversion in an easy to use workaround. This only gives credibility to Paypal but does not actually use crypto as a form of payment.
Adam T. Hark, Managing Director of Wellesley Hills Financial, LLC puts it as “another implicit rejection of Bitcoin as an acceptable form of payment.”
Visa’s Crypto Payment Announcement
The second issue Bitcoin has on its journey to mass payments is Visa’s announcement for its non crypto-to-fiat conversion payments pilot program.
Visa will test crypto-to-crypto payment and settlement in partnership with the first federally chartered crypto-asset bank, Anchorage.
This announcement is breakthrough and will indefinitely help land cryptocurrencies as a payment method eventually, but it does not include Bitcoin.
The protocol will only include CBDCs or central bank digital currencies, and stablecoins – falling in line with Mastercard’s crypto-payment strategy announced recently.
Paypal’s workaround, and Visa/Mastercard’s exclusion of Bitcoin in their crypto payments systems are significant rejection to Bitcoin’s traction as a form of payment.
These are three of the largest payment networks in the world rejecting Bitcoin not the Federal Reserve.
On top of the big guys rejecting Bitcoin, anonymity creates conflicts with anti-money laundering efforts and the price is incredibly volatile.
However, on the flip side, Bitcoin could continue to gain traction as an asset for investors due to its appreciating price. This wouldn’t be so bad would it?
We’re looking forward to watching what happens next. What are your thoughts on Bitcoin as a form of payment? Let us know in the comments below or shoot us a message!