Cryptocurrencies have experienced some difficulty over the past year, with values rising and falling, no doubt influenced in part by Elon Musk, the CEO of influential Tesla, with Bitcoin. After Musk announced early in 2021 that Tesla It will accept bitcoin payments for car purchases in the United States, following up on the company’s $1.5 billion investment in bitcoin in February.
Despite this, a growing number of large institutions are joining digital payments, and even countries have recently joined in with El Salvador in legal tender for Bitcoin.
Because while cryptocurrency volatility remains a concern, the expectation of clearer regulatory guidelines and the emergence of central bank digital currencies now provides financial managers with more avenues for “stress testing of crypto use cases,” he says. Alexander Pant, Head of Research, Gartner Finance Practice.
This is what has given many institutions the confidence to embrace cryptocurrency in 2021, with Gartner increasing interest in digital currencies and blockchain applications among CFOs since the beginning of 2021.
Mastercard and Visa are among the large organizations that are adopting encryption
Among some of the major global players who have already made the decision to use and accept cryptocurrency this year is Mastercard, which announced in November that it would allow partners on its network to enable its customers to buy, sell and carry cryptocurrency using a digital wallet, as well as reward them with cryptocurrency under their loyalty programs. .
Credit card company Visa is also on board, experimenting with a scheme with the Crypto.com platform to accept cryptocurrency to settle transactions on its payment network, and will now accept USD Coin, a stable cryptocurrency pegged to the value of the US dollar.
AXA InsuranceAnd MicrosoftStarbucks, Tesla, PayPaland Sotheby’s, Expedia, and Coca Cola Among the biggest brand names 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 goods at the coffee chain with transferred Bitcoin.
Even wider adoption expected in 2022
Larger companies’ wider adoption of cryptocurrency will gain momentum in 2022 and beyond, according to new Gartner The report, which predicts that a fifth of large organizations will use digital currencies by 2024.
So, what is driving this broader adoption?
The increasing mainstream acceptance of cryptocurrencies on traditional payment platforms and the emergence of central bank digital currencies (CBDCs) will prompt many large companies to “incorporate digital currencies into their applications in the coming years.” Aviva Litan, Senior Analyst, Vice President, Information Technology Practice, Gartner.
Gartner says the increased acceptance and adoption of cryptocurrencies is driven in part by the already healthy environment for providers and turnkey solutions available to organizations that have identified a specific cryptocurrency use case.
According to Litan, among the primary use cases for digital currencies identified, there will be no need for most organizations to develop a custom blockchain application package. “Many large banks, payment platforms, institutional digital asset custodians, and wallet providers have already taken on the heavy burden in this space, which should provide large institutions with minimal friction in deploying their crypto applications.”
Additional factors that could make digital currency applications more acceptable to financial managers in the next 12-24 months include hedging against the highest rate of inflation in more than 39 years, increased regulatory clarity, improved energy use, and the adoption of employees, consumers and suppliers.
“There has long been a theoretical appeal in using blockchain and digital currencies for financial managers as a way to cut costs, increase transaction processing speed, reach new global customers, move toward continuous accounting and auditing, and create a system that is free of errors and fraud — now that congressional oversight begins to evolve and the possibility of joining the As more central banks join China in launching a central bank digital currency, we can see a path where the use of digital currencies can be more predictable and stable in the future.”
Pant also noted that the macroeconomic pressures associated with persistent high inflation, and its impact on fiat currencies, may prompt more financial managers to explore some digital currencies as a potential store of value for a portion of their reserves.
“2022 is the year we expect CFOs to rapidly increase their knowledge of digital assets, currencies, and other blockchain applications. When the CEO and board of directors begin to seek the CFO’s opinion, 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 plotting scenarios of how they would respond if a country or supplier moved to do business with digital currency only and what steps they would take as a result.”
The use of large companies is interested in cryptocurrency
Gartner predicts that digital currencies will be used primarily by these organizations for payment, a store of value and the ability to take advantage of the high-return investments available in decentralized finance (DeFi) applications.
We highlight five recent use cases by large organizations in using cryptocurrency.
1. BURGER KING
While Burger King Moscow and Venezuela began accepting bitcoin as payment for a meal in 2020, burger king North America got into the crypto process until recently when it partnered with investment app Robinhood Crypto in a limited-time promotion, ‘Burger King with a Side of Crypto’ giveaway, allowing Royal Perks members to claim free cyptocoin every day.
Last year, the payments app introduced a way for users in the US to buy, sell and hold selected cryptocurrencies via their cash or cash as well as their cash accounts as well as learn and track crypto within their PayPal app.
3. Coca-Cola Amatil
Coca-Cola Amatil, one of the world’s largest non-alcoholic and ready-to-drink bottlers and distributors in the Asia Pacific region, partnered with online asset platform Centrapay in 2020, allowing them to accept bitcoin as an official payment method. There are now over 2,000 vending machines in Australia and New Zealand that accept cryptocurrency.
The first major auction house to accept cryptocurrency for physical artwork, Sotheby’s offered bitcoin or ether as a payment option when it presented Banksy’s artwork Love Is In The Air at its art sale in New York in May 2021.
AT&T became the first mobile adopter in 2019 to accept cryptocurrency payments, which it implements via BitPay.