• Tue. Aug 2nd, 2022

How large companies are driving digital currency adoption

Digital currencies have been on a roller coaster ride over the past year, with values ​​rising and falling, no doubt influenced in part by influential Tesla CEO Elon Musk’s upward / downward relationship with Bitcoin. Following Musk’s announcement in early 2021 that You’re here would accept bitcoin payments for vehicle purchases in the United States, following the company’s $ 1.5 billion investment in Bitcoin in February.

Despite this, a growing number of large organizations are moving into digital payment, and even countries have jumped into action with El Salvador recently making Bitcoin legal tender.

Because while the volatility of cryptocurrencies remains a concern, the anticipation of clearer regulatory guidance and the advent of digital currencies from central banks now offer CFOs more opportunities to “pressure test use cases.” digital currencies, ”says Alexander Bant, research director in the Gartner Finance practice.

And this is what has given many companies the confidence to adopt cryptocurrencies in 2021, with Gartner noting an “increase in interest in digital currency and blockchain applications among CFOs” from the start. from 2021.

Mastercard and Visa among large organizations adopting crypto

Among some of the big global players who have already made the decision to use and accept cryptos this year is Mastercard, which announced in November that it would allow partners in its network to allow their consumers to buy, sell and hold cryptocurrencies using a digital wallet, as well as reward them with digital currencies as part of their loyalty programs.

The credit card company Visa is also on board, piloting a program with the Crypto.com platform to accept cryptocurrency to settle transactions on its payment network, and it will now accept USD Coin, a stable crypto coin. which is linked to the value of the US dollar. .

AXA Insurance, Microsoft, Starbucks, Tesla, Pay Pal, Sotheby’s, Expedia and Coca Cola are among the biggest names of companies to adapt to the use of cryptocurrencies.

At Microsoft, Bitcoin can be used to pay for a variety of services, including Xbox Live and Skype; while at Starbucks, customers can use the new Bakkt app to pay for drinks and merchandise at the coffee chain with converted Bitcoin.

Even wider adoption expected in 2022

Even wider adoption of crypto by large companies will gain momentum in 2022 and beyond, according to a new Gartner report, which predicts that one-fifth of large organizations will use digital currencies by 2024.

So what is driving this wider adoption?

The growing acceptance of cryptocurrencies on traditional payment platforms and the rise of central bank digital currencies (CBDCs) will push many large companies “to incorporate digital currencies into their applications in the years to come,” says Avivah Litan, VP Analyst in Gartner’s IT practice.

Gartner says the increased acceptance and adoption of crypto is in part due to the already healthy environment of service providers and standard solutions available to companies that have identified a specific use case for digital currencies.

Among the top digital currency use cases identified, Litan says, most organizations won’t need to develop a custom blockchain application stack. “Many large banks, payment platforms, institutional digital asset custodians and wallet providers have already done the heavy lifting in this area, which should provide large enterprises with minimal friction in deploying their own applications. digital currency. “

Other factors that could make digital currency applications more palatable to CFOs over the next 12-24 months include the highest inflation hedge in over 39 years, increased regulatory clarity, improved energy use and adoption by employees, consumers and suppliers.

“There has always been theoretical appeal in using blockchain and digital currencies for CFOs as a way to cut costs, increase transaction processing speed, reach new global customers, ” move towards continuous accounting and auditing and create an error-free and fraud-free environment. free environment, ”says Bant. “Now, with congressional oversight starting to develop and the potential for more central banks to join with China in launching a CBDC, we can see a path where the use of digital currencies will potentially be more predictable and stable. in the future. “

Bant also noted that macroeconomic pressures related to persistently high inflation and its impact on fiat currencies may push more CFOs to explore certain digital currencies as a potential store of value for part of their reserves.

“2022 is the year we expect CFOs to rapidly improve their knowledge of digital assets, currencies, and other blockchain applications. When the CEO and the Board start asking the CFO’s advice, they need to have a perspective on the risks and points of differentiation for their organization, ”he explains. “We are starting to see some Fortune 500 companies developing scenarios of how they will react if a country or vendor starts doing business with digital currency only and what actions they will take as a result.”

Large Business Use Cares About Crypto

Gartner predicts that digital currencies will be primarily used by these organizations for payment, a store of value, and the ability to leverage high-yield investments available in Decentralized Finance (DeFi) applications.

We highlight five recent use cases by large organizations in the use of cryptography.

1. Burger King

As Burger King Moscow and Venezuela began accepting bitcoin as a payment method for a meal purchase in 2020, Burger King North America got into crypto action until recently when it partnered up with the Robinhood Crypto investment app for a limited-time promotion, the ‘Burger King with a Side of Crypto ”, allowing Royal Perks members to claim a free cyptocoin every day.

2. PayPal

Last year, the payments app introduced a way for US users to buy, sell, and hold certain cryptocurrencies through their cash or cash plus accounts, and also learn and track crypto in their PayPal app.

3. Coca Cola Amatil

One of the world’s largest bottlers and distributors of non-alcoholic and ready-to-drink beverages in the APAC region, Coca-Cola Amatil partnered with the online asset platform Centrapay in 2020, enabling them to accept the bitcoin as an official payment method. There are now over 2,000 ATMs in Australia and New Zealand that now accept cryptocurrency.

4. Sotheby’s

The first major auction house to accept cryptocurrency for physical works of art, Sotheby’s introduced bitcoin or ether as a payment option when it featured Banksy’s artwork ‘Love Is In The Air ”during its art sale in New York in May 2021.

5. AT&T

An early follower, AT&T became the first mobile operator in 2019 to accept cryptocurrency payments, which it makes through BitPay.

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