By Mousume Roy, APAC Reporter, HCL Technologies Ltd.

 

Bitcoin payments are always a volatile topic of discussion. Oxford City football club in the United Kingdom recently announced plans to accept matchday payments in Bitcoin, including ticket, food, and drink purchases at their stadium. The club's director of football said paying with Bitcoin could "become the new normal" at the club.

Italian high-end luxury brand, Gucci, is now accepting ApeCoin as payment for purchases of their products in select boutiques in the US.

Termed as the dirty currency”, bitcoin has always operated in a grey area, unable to find legitimacy due to regulation challenges. Governments fear it will limit their control over currency and bankers believe it will make their industry irrelevant. As a result, nations and banks are slowly moving towards making it legal tender.

During an FT Live panel hosted in partnership with HCL Technologies at the World Economic Forum 2022, Rahul Singh, President Financial Services and Digital Process Operations from HCL Technologies mentioned: “The reason for slow user adoption is because the blockchain and crypto space is complicated and there is a lack of understanding around it. Until now, there has been a lack of use cases.”

“User adoption is now accelerating, and this acceleration has significant implications for the people who don’t have access to banking services, which stands at nearly two billion,” Singh added.

“If we can combine mobile, who 60% of the world’s population has access to, with blockchain and payment transfers, this increases the opportunity to spread financial services to unbanked people,” confirmed Singh.

Tumultuous crypto market and changing regulations

During the FT panel, Richard Nash, Head of Government Relations at PayPal explained that regulatory bodies and government scrutiny of crypto assets are stepping up.

“There is a significant opportunity in the industry. But, to accelerate blockchain adoption in financial services, governments and regulators must get comfortable with crypto at scale. These policy and regulatory discussions are almost as exciting as the technical side of blockchain, and there is a real opportunity in the industry.”

 A new report from Immunefi claims that crypto lost over $670 million in Q2 2022. The losses were a result of four hacks: Decentralized stablecoin protocol Beanstalk lost $182 million; layer-1 blockchain bridging protocol Harmony Horizon lost $100 million; and decentralized finance (DeFi) protocols Mirror and TribeDAO lost $90 million and $80.34 million, respectively.

Global banks have started peppering their conversations and announcements with talk of cryptocurrencies, initial coin offerings (ICOs), beacon chains, and other emerging digital concepts. Additionally, an uptick in government spending and a drop in revenue indicated an increasing focus on non-governmental-based assets.

During the same World Economic Forum panel, referencing Ripple Central Bank Digital Currency (CBDC) Pilot Test and Ripple’s work in Bhutan, Brooks Entwistle, SVP of Global Customer Success and Managing Director for APAC and MENA at Ripple, emphasized the importance of building relationships with regulators and governments and educating them on the value blockchain can bring to their citizens.

He said: “CBDCs are a great way for governments to understand the value that blockchain can bring to their citizens, but there needs to be greater interoperability between central banks and digital currencies.”

As more traditional industries begin to embrace bitcoin, it’s clear this virtual currency is slowly gaining significant legitimacy in both the consumer and business worlds. There are still many questions to be answered and hurdles to overcome, but bitcoin payments and blockchain initiatives are paving the way for the new standard of cryptocurrency and what it means to be a truly global society.