Even for companies outside of the payments industry, the potential for cryptocurrency to provide access to more businesses and consumers has an allure that the
For many younger consumers, crypto still has appeal not only as an investment but also for its purported utility for payments.
"Younger people think crypto is a way for them to attain wealth that they may not have access to otherwise," said Jason Walker, co-founder of Thrive HR Consulting, which is working with corporations to offer crypto-related employee benefits. The market drop has cooled the buzz, but has not eliminated enthusiasm for cryptocurrency and new use cases entirely, Walker said. "They still see crypto as a way to wipe away what they see as the inadequacies of the traditional banking and payment system."
Companies like Thrive and Unifimoney, a money management firm, are
More than a third of millennials and half of Generation Z would be satisfied with receiving half of their salary in cryptocurrency, according to the
"This is not the role of cryptocurrency as a majority of people see it … as a speculative asset … but its use in a business space where the goal is to improve stability," said Enrico Camerinelli, a strategic advisor at Aite-Novarica, adding the use of stablecoins and the transparency of the blockchain will drive demand for peer-to-peer payments and business transactions.
New research from Aite-Novarica of about 800 people who work at mid-to-large organizations globally found that 17% of businesses had made payments in crypto in the past 12 months, with 70% expecting to make cryptocurrency payments in the next 12 months.
We speak at a lot of HR conferences where half of the people think crypto salaries is the coolest thing in the world and the other half think it's the stupidest thing they have ever heard of.
Crypto payment types primed for expansion include cross-border payments such as remittances; and transactions that support carbon offsets and other energy-related expenses, according to Camerinelli. Projects like
There are two primary ways that traditional finance and fintech companies can benefit from Web 3.0, which entails the use of distributed ledgers and crypto, according to Kristiane Mandraki, director of business development and marketing for Praxent, a fintech app developer. Companies can provide infrastructure such as payment rails, tokenized deposits and smart contracts.
Another opportunity is improving user experience, or providing a more intuitive onramp for consumers into crypto, Mandraki said.
"Where banks and fintechs can create significant value for their customers is becoming their trusted crypto guide, providing easy access," Mandraki said. "Banks are well-positioned to help consumers navigate the complex and often confusing landscape of digital currencies."
Thrive, whose clients include the health care company Abiomed, the supply chain manager LockedIn Logistics, the lead production and recycling company Ecobat, is preparing these organizations to pay a portion of their payrolls in cryptocurrency.
Cryptocurrency payroll is an added option that supports the trend toward
It's surprising given the cryptocurrency's volatility, but the New York Yankees, the Houston Rockets, MVB Bank and Vantage Bank are among the companies that have begun letting employees invest some of each paycheck in bitcoin in recent months.
"We speak at a lot of HR conferences where half of the people think crypto salaries is the coolest thing in the world and the other half think it's the stupidest thing they have ever heard of," Ramirez said.
The firm also recently adjusted its own payment technology to pay a supplier that wanted to be paid in cryptocurrency.
"Sometimes you have to eat your own dog food," Ramirez said. "There are going to be businesses and consumers who want to be paid in crypto and they will be subsequently using cryptocurrency for payments in other areas."
As is normally the case, executives at Thrive and Unifimoney view stablecoins and eventually central bank digital currencies as the types of cryptocurrency that will most likely dominate digital-asset payments. Stablecoins, which are backed by traditional currency such U.S. dollars, are designed to be less volatile than Bitcoin, Ether and other cryptocurrencies; and payment networks such as
Cross-border peer-to-peer transfers in stablecoins are low-cost and put pressure on organizations such as Swift, the international payments protocol, said Max Osbon, chief investment officer at Unimoney, which provides digital wealth management for credit unions and community banks.
Unimoney's cryptocurrency services include buying, holding and selling. It does not directly support cryptocurrency payments, though it does integrate with its clients' online banking platform, which brings cryptocurrency trading into close proximity to payments and other services.
The lingering challenges for cryptocurrency payments as a transaction choice at stores include the
