Crypto payments are useful when…
A question I get asked a lot is where do I think crypto as a form of payment works well:
Cross border transactions: For example, crypto could make it easier if you’re looking to move money more quickly across borders, for example in the case of remittances or when there’s an emergency with the national financial sector. It can be quicker and cheaper than going through traditional bank flows.
Unique assets: NFTs, art, and other alternative assets can be a great use case for crypto. Ownership can be tracked through the block chain, and it allows for crowd sourcing and tracking of unique assets.
Cases were I don’t think crypto payments work well (at least right now):
Day to day purchases: There’s still a lot of hurdles for a user to go through to use crypto for small and frequent transactions (ex. buying coffee). Crypto is not accepted widely yet and the user has to bear the onus of calculating and paying a capital gain/loss on the disposal of that crypto.
Replacing sovereign currencies: This can depend on where you live, but for countries with stable macro-economies, I think it will be a long time before sovereign currencies like the dollar and euro are displaced by crypto (if ever).
Click here to listen more about my thoughts on crypto payments on the Rise Fintech podcast
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Disclaimer: All opinions are my own. The content on this site and on the podcast does not constitute financial, legal, accounting, tax, or investment advice.
