The Rise Of Using Cryptocurrency In Business

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December 28, 2021 Business

Cryptocurrencies are both controversial and promising.

Many people have strong opinions on crypto, including government officials, billionaires, and top entrepreneurs. Despite backlash and skepticism, cryptocurrency shows no sign of slowing down.

Between 2020 and 2021, the crypto adoption rate increased by a mind-boggling 880%.

While cryptocurrencies are primarily seen as investment instruments, today there are thousands of products and services you can buy with them.

From booking hotels to playing poker, there are very few things that cryptocurrency cannot do. The rise of using cryptocurrencies in business is not a mere fad.

In many ways, it is an indication of our relationship with money in the future.

There are many reasons behind increasing crypto adoption rates in businesses and many challenges to the transition as well.

The sector is still in its nascent stage and will grow exponentially over the next few years.

The rise of using cryptocurrency in business

While investigating the reason behind the rising use of crypto in transactions, we will come across many factors that make it a better payment option than fiat currency.

From ensuring privacy to reducing processing fees in cross-border payments, the list of benefits is long.

Below we will discuss the most important developments in the sector for ease of using cryptocurrencies in businesses, both as buyers and sellers.

1. Gives businesses access to new demographics

In 2022, the businesses that solely operate on cash are at a huge disadvantage. Almost every major vendor today accepts some form of digital payment.

Accepting crypto payments is a natural progression from here.

By enabling people to pay in crypto, businesses are opening their doors to a new set of customers. These customers not only pay in crypto as an alternative to fiat currency. For many, cryptocurrency is their preferred mode of payment irrespective of what they are buying.

With more and more businesses realizing this opportunity, the number of vendors accepting crypto payments has increased.

In the United States alone, more than 2000 merchants accept crypto payments.

Globally, the number is more than 15000.

The results are evident in the ever-growing number of businesses accepting crypto payments.

With Bitcoin establishing itself as the global standard of crypto, the logistical and legal aspects of crypto payments have also become easier.

2. Easing of regulatory guidelines

The biggest threat that cryptocurrency faces today is from governments. However, 2020 and 2021 saw a considerable easing of regulatory guidelines to facilitate businesses accepting cryptocurrency payments.

With El Salvador becoming the first country to accept Bitcoin as legal tender, the possibilities have increased significantly.

In the United States, as in many other countries, crypto entrepreneurs do not fear an abrupt ban on the ecosystem despite more detailed regulatory guidelines.

With the exception of China, no major country has launched a full-blown attack on crypto innovations. On the contrary, more and more national leaders are opening up about the possibilities of cryptocurrencies. The impetus from governments lets businesses adopt cryptocurrency without fear of legal trouble.

CBDCs, or Central Bank Digital Currencies, are already in experimental stages in many countries. Since CBDCs are backed by governments, they do not bear the same legal issues as cryptocurrencies. In the future, businesses will adopt CBDCs as well. The businesses that already have the infrastructure in place to accept crypto payments will be at an advantage when CBDCs enter the mainstream.

3. The role of third-party converters

Accepting payments in cryptocurrencies involve a great deal of infrastructural development and the use of advanced technology.

Non-tech companies were largely left out of the crypto space as a result of this.

With the advent of third-party enterprises that convert digital assets into fiat currency, that is no longer a hindrance for businesses wanting to accept cryptocurrency payments.

By employing a third-party converter, companies can keep cryptocurrencies outside their balance sheets while allowing customers to use them. It is a great option for businesses that do not have the necessary expertise to enable crypto payments.

While the third-party enterprises charge a fee for these services, the net profit adds up as a result of increased sales.

The presence of converters has brought those businesses to the crypto space that did not have any premeditated intention of doing so.

However, third-party converters do not take away the regulatory and compliance requirements that businesses must still follow. At the same time, they make the process easy and fast, and often offer consultancy in crypto-related matters.

4. Financial institutions are adopting cryptocurrencies

Before Bitcoin came into existence, financial institutions had absolute control over the flow of money and payment systems.

For a long time, cryptocurrencies were posed as binaries of traditional financial institutions. It contributed to public doubt and fear, and many actively resisted cryptocurrencies as a consequence.

In recent times, financial institutions like banks are becoming increasingly involved in the crypto space. Not only does it win back public confidence, but also supplies a lot of capital to the sector.

Most businesses depend largely on financial institutions. As long as these powerful entities resisted cryptocurrencies, it was difficult for businesses to get into the sector despite wanting to do so.

Business owners now feel more secure and comfortable with cryptocurrencies. Apart from the security factor, it makes legal processes simpler and compliance easier.

While banks and asset management companies in many parts of the world now have digital asset management arms, there’s a lot left to achieve.

The inherent qualities of cryptocurrency make it incompatible with centralized institutions. There are, however, other options like Protego Trust, an OCC chartered trust bank among the most highly regulated, crypto-native banks in the world today.

Crypto adoption rates for businesses will increase even more when these divergent sectors arrive at an amicable solution.

5. Ease of buying cryptocurrency

Buying cryptocurrencies is easier than ever in 2022.

The availability of multiple cryptocurrency exchanges has made it possible for people to buy cryptocurrencies as and when they want. It is a very important contributor to growing crypto adoption rates since buying cryptocurrency was not always this easy.

Today you can buy Ethereum with a credit card, convert fiat currency to cryptocurrency with a few clicks, and use Bitcoin ATMs in major cities.

While global leaders like Binance and Coinbase have widespread operations and world-class services, regional crypto exchanges are not far behind. Apart from having easy access to cryptocurrencies, people also have a choice of platforms. Whether you’re interested in buying Bitcoin or altcoins, you can find an exchange that suits your needs. All you have to do is research and compare the features of each exchange.

With cryptocurrency being easily available, businesses that do not accept crypto payments will miss out on huge profits. There is a positive correlation between the ease of accessing crypto and the number of businesses accepting payments in cryptocurrency. Cryptocurrency exchanges also ease the burden of dealing with technical complexities for users. Today, all you need to buy cryptocurrencies are a smartphone and internet connectivity.

6. Caters to privacy-conscious customers

As a population, we have become more privacy-conscious now than we were even a few years ago.

Social media scandals and data breaches have a big contribution to it. In the case of payment gateways, privacy is even more important to most people.

Cryptocurrency transactions work in a peer-to-peer model where there’s no role of a centralized intermediary.

As a result, there is no chance of government surveillance or any form of surveillance. That makes it the preferred mode of payment in many countries where surveillance is stringent.

Some cryptocurrencies like Monero and Zcash take privacy to the next level. While there are controversies about these tokens, they undoubtedly attract privacy-conscious individuals.

Blockchain makes cryptocurrency transactions secure and traceable. There’s no chance of counterfeit transactions in the blockchain, making it a suitable option for both the sender and the receiver.

The efficiency of blockchain technology is another reason behind the rising use of cryptocurrency in business.

7. Buy almost everything with cryptocurrency

With a Bitcoin debit card, you can buy everything that you could have bought with a traditional debit card. Since the receiver gets the amount in fiat currency, there is no issue of compatibility.

Even without using a Bitcoin debit card, there are thousands of things you can buy today with Bitcoin and other cryptocurrencies.

From cars to real estate to software, there are very few things that you cannot buy with crypto. Be it luxury Lamborghini cars or daily use Microsoft tools, we can buy both high-end and regular products and services with crypto.

The sheer number of options has encouraged many to start transacting in cryptocurrency. While Bitcoin remains the global standard, other cryptocurrencies like Ethereum and Dogecoin are also very popular now.

PayPal, Twitch, Overstock, Shopify, AT&T, and BitDials are a few examples of leading companies embracing cryptocurrencies. They have set precedence for other companies, and small businesses around the world are following their footsteps.

With more businesses entering the market, the use of cryptocurrency in business will further increase.