Payment Method

When Did Cryptocurrencies Become a Payment Method?

In 2020, the cryptocurrency market started booming. As institutional adoption is accelerating, crypto payments are accepted by more businesses than ever. But when did it start?

International finance is evolving rapidly, as it is fueled by blockchain, AI, fintech, and mobile devices. By 2022, global e-commerce is projected to reach $5.69 trillion. As the online marketplace is expanding, the future belongs to companies that embrace innovation.

Resistance to Change

Despite the development of retail in recent years, its payment systems have been largely static. Debit and credit cards account for the majority of transactions. Cryptocurrencies offer new benefits, so more and more enterprises recognize their value. 

Crypto as Payment Currency 

Peer-to-peer transfer of value within a decentralized environment eliminates the need for intermediaries like banks or payment processors. Aside from Bitcoin, there are over 4000 altcoins in circulation, and their total market cap has already exceeded $200 billion.

Blockchain does not enable transfers unless they are initiated by the rightful owners of the funds. The “push” payment mechanism does not allow chargebacks. As a result, cryptocurrency transactions may not be performed without your permission, and they cannot be forged either. This makes them incredibly secure.

Thanks to cryptocurrencies, customers, and merchants can exchange funds quickly and directly, bypassing the conventional intermediaries. However, as a payment method, they are still in their infancy. The pandemic has sped up the implementation of crypto payments, and increasing numbers of businesses are turning to them as a more convenient and cost-effective solution. 

Slow Adoption 

In 2014, PayPal allowed online vendors to accept Bitcoin payments via its collaboration with select exchanges. However, until recently, the idea of cryptocurrency gaining importance in the mainstream market would be considered laughable. The coronavirus pandemic caused the markets to turn to digital currencies, which have officially become alternative modes of payment.

Companies like Microsoft, Shopify, Starbucks, and AT&T have started accepting payments in crypto. These merchants can now tap into a $200 billion market. Recently, PayPal has launched a crypto checkout service that lets customers in the US use their crypto assets to pay at millions of online merchants. Today, the majority of crypto transactions involve these coins:

  1. Bitcoin (BTC)
  2. Bitcoin Cash (BCH)
  3. Ethereum (ETH)
  4. Ripple (XRP)
  5. USD coin (USDC)
  6. Gemini USD (GUSD)
  7. Paxos Standard (PAX)

The Sum Up

Cryptocurrency payments are increasingly common in different industries. The pandemic has accelerated their adoption as alternative payment methods. Crypto coins bring fast and secure transactions and facilitate the creation of a truly borderless economy.

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