Recently, MasterCard announced that it is including cryptocurrency in its network.
This essentially meant that MasterCard would support select cryptocurrencies on their network. Apart from the traditional payment methods, businesses and customers can transact using cryptocurrency. MasterCard considers it a win-win decision as customers will have payment flexibility, and businesses can build loyalty by offering flexible payment options.
With 45% of customers considering the option of using cryptocurrency next year, the decision of including it in the network could not have come at a better time.
In fact, cryptocurrency received a boost when El Salvador became the first country to recognize cryptocurrency as a legal tender officially. Economist Eshwar Prasad also predicts that the era of cash is coming to an end, and digital currencies like cryptocurrency will replace it.
So, what do all these developments and predictions mean for the overall future of cryptocurrencies, and what can customers and businesses expect from them?
Let’s understand this in detail.
To answer this question, we must first understand why cryptocurrencies are becoming popular among customers and businesses.
Cryptocurrency is gaining momentum, with 1.5 million transactions occurring every day. More customers will warm up to cryptocurrencies as the world moves towards cashless and contactless payments. Here are a few factors that are contributing to its popularity.
Businesses have also started adopting cryptocurrencies as an alternative payment option. Brands like Coca-Cola and Yum brands, for instance, have already begun accepting payments in cryptocurrency. More than 2,300 merchants are accepting bitcoin as a payment option in the US.
Here are some benefits for businesses and merchants:
The benefits of cryptocurrency have not translated to the ground yet. 67% of cryptocurrency owners say that there’s a shortage of merchants who accept digital currencies. Businesses are yet to fully trust crypto payments as one of the alternative payment options. That’s not all. There are also other bottlenecks in cryptocurrency adoption.
Coming back to the question, yes, there’s a chance that cryptocurrency will find wide acceptance among customers and businesses in the future. The global cryptocurrency market is poised to hit a valuation of $4.94 billion by 2030. Over 50% of crypto investors are willing to use it to pay for shopping.
However, countries and regulators must reach a consensus on cryptocurrency soon. Gita Gopinath, the IMF Chief, said that banning cryptocurrencies could pose challenges for emerging markets. There’s an urgent need for strong regulations.
Regulations could have some repercussions on the peer-to-peer architecture of cryptocurrency. However, it would be necessary to encourage more businesses and customers to use it.
While these issues are ironed out, financial institutions must start preparing to include cryptocurrency in their network and stay future-ready.