These Bizs Accept Crypto Payments, But Nationwide Adoption Is Unlikely

When Bitcoin started in 2009, it was virtually worthless.

Today, more than a decade later, the cryptocurrency industry has seen several ups and downs, reaching an all-time high of over US $ 61,000 in mid-March. It is also increasingly accepted by traditional investors and businesses.

Most recently, a Singaporean investor made waves in the art world by spending a record US $ 69 million (S $ 93 million) in cryptocurrency on a digital work of art.

The buyer of the digital collage, Vignesh Sundaresan, is one of the oldest investors in non-fungible tokens (NFTs). NFTs operate as a new type of digital asset and have rapidly grown in popularity in recent years.

Anyone can “symbolize” their work to sell it as an NFT, and interest in doing so has been fueled by recent million dollar sales that hit the headlines. For example, an animated GIF of Nyan Cat – a 2011 meme of a pop-pie flying cat – sold for over US $ 500,000.

Electric car giant Tesla has also started accepting bitcoin as a payment method in the United States. While the feature is not yet available globally, founder Elon Musk has said it will be available in new markets in the future.

Closer to home, established local players also have an eye on the digital asset space. Last December, DBS Bank launched a blockchain-based digital exchange that allows investors to trade cryptocurrencies and businesses to raise funds through the tokenization of assets.

Additionally, Singapore’s sovereign wealth fund Temasek Holdings apparently bought bitcoin from miners, according to Global macro investor Raoul Pal.

What are cryptocurrency and Bitcoin?

how does bitcoin work
Image Credit: Blockgeeks

Cryptocurrency is the technology that serves as a medium for performing financial transactions, providing a safe and secure platform for transactions using cryptographic technology.

On the other hand, bitcoin is the digital currency that uses cryptocurrency. It was founded by Satoshi Nakamoto in 2008 and was created in order to speed up cross-border transactions, reduce government control over transactions, and simplify the process without the need for third-party intermediaries.

Bitcoin versus crypto
The main differences between bitcoin and cryptocurrency / Image credit: Vulcan Posgt

There are many characteristics of bitcoin that still make it unique and unprecedented in the history of money. For example, they are immutable, transparent and private.

This means that it is impossible to forge or tamper with bitcoin, every transaction is recorded on the blockchain, and it is almost impossible for a foreigner to identify the owner of a Bitcoin wallet.

While the characteristics of bitcoin will largely remain the same, an increasing number of uses and applications of bitcoin are being conceptualized at an exponential rate.

Some use cases for bitcoin include being a cheap peer-to-peer payment network – also the most common use among the general public – a darknet currency and, more recently, a financial asset in which many invest.

Why do businesses accept Bitcoin as a payment method?

kopitiam bitcoin
Image Credit: Inside Bitcoin

The growing popularity of cryptocurrency payments isn’t the only reason businesses are starting to accept them. There are a myriad of compelling reasons that could prompt businesses to implement the new payment method.

First, the transactions carried out are permanent and cannot be changed or deleted, so the risks of fraud are reduced to a great extent. Depending on the payment gateway, additional security services can be provided, which helps build trust between businesses and their customers.

Then, confidentiality is guaranteed because anonymity is a feature of cryptocurrency payments. The amount of data collected will be significantly less than that of traditional banks, which could be a selling point for customers.

These are just a few of the reasons why companies choose to offer cryptocurrency payments. In Singapore, even a Kopitiam outlet has started accepting payments in digital currencies, including Bitcoin, Ethereum, and Creatanium.

Kopitiam converts cryptocurrencies into fiat every week with the help of his fintech partner. It also bears the risk of currency fluctuations. Food court exhibitors will then receive their winnings in Singapore dollars.

According to a report from Inside Bitcoin, Kopitiam CEO Alden Tan said that allowing cryptocurrencies on the system would help them learn more about the payments ecosystem.

Other stores that accept cryptocurrency payments in Singapore include Epic Gear, Oyster Bar, Artistry, and more.

Progress will be slow in Singapore

Even though it is gaining ground in Singapore, cryptocurrency trading remains weak relative to stocks and bonds.

The combined peak daily trading volumes of Bitcoin, Ethereum and XRP represent only 2% of the average daily trading volume of securities on the main exchange last year.

This means that at the current volume of trade, the number of people who may be interested in cryptocurrency payments in Singapore is probably not large enough for widespread adoption.

Additionally, Singapore has already struggled to switch to cashless payments. Even though digital payments like PayNow have taken off, Singaporeans are still staunch supporters of cash. There are 4,100 ATMs and cash pick-up points today, up from 3,700 five years ago.

Monetary Authority of Singapore (MAS) board member Ong Ye Kung said in a speech to parliament this year that “cash will remain a familiar and convenient way to transact.”

This situation is exacerbated by the problem of an aging Singaporean society, with the older generation being more skeptical of technologies such as digital payments.

With cryptocurrency payments being a new way to pay, it is likely to face higher levels of skepticism and criticism from citizens. In addition, the government recently warned Singaporeans to “exercise extreme caution when trading cryptocurrencies” which could lead to less use of these payments.

These warnings may well resonate with Singaporeans when Bitcoin price fluctuations are factored in. Additionally, Bitcoin transaction fees can go up to S $ 22.53 per transaction.

While we are unlikely to see widespread adoption of cryptocurrency payments in Singapore, early adopters will continue to buy and invest in this one and we would likely see more applications of blockchain technology. .

Featured Image Credit: Observer

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Jothi Venkat

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