- Buterin said many often underrate the superiority of crypto payments.
- Binance and Mastercard partner to bring Bitcoin payments to street stores.
Ethereum CEO and co-founder Vitalik Buterin said that many people still don’t believe cryptos for payment settlements are better than fiat. He explained that crypto is more convenient for paying charities and making international payments. In a Twitter thread, Buterin added that convenience and resistance to censorship make crypto better for businesses (within and outside the country) to settle financial transactions and even make payments to charity organizations.
People continue to underrate how often cryptocurrency payments are superior not even because of censorship resistance but just because they're so much more convenient.
Big boost to international business and charity, and sometimes even payments within countries.
— vitalik.eth (@VitalikButerin) August 24, 2022
Key data proves the global growth in crypto payments adoption is growing fast. Last month, a report by PYMNTS (a data platform) discovered that 85 percent of businesses with over $1 billion in yearly revenue stated that they plan to adopt crypto payments. According to these respondents, crypto payments will enable them to attract and retain new customers.
There has also been a rapid growth in the availability of crypto debit cards. Some cards like Wirex reward users with crypto cashback when they use their crypto cards for payments. Thus, there has been an increase in the use of popular digital currencies and fiat to make payments. Also, more crypto card holders have been withdrawing cash with their cards at crypto ATMs.
As noted by the Ethereum CEO, cryptos are useful for overseas payments. More importantly, these payments take less time to process and with fewer fees compared to making such payments with fiat. A recent example of crypto’s usefulness for international payments is the Russia-Ukraine war.
On August 18, Ukraine’s prime minister, Mykhailo Fedorov, tweeted that the country’s aid for Ukraine nonprofit group has received $54 million worth of cryptos in donations. However, some people aren’t bullish about crypto payments citing unstable transaction fees, ease of use, regulatory risk, and price volatility. Some also claim that specific digital currencies, especially BTC and ETH, take long processing times.
With $54 M raised by @_AidForUkraine, we've supplied our defenders with military equipment, armor clothes, medicines and even vehicles. Thanks to the crypto community for support since the start of the full-scale invasion! Donation by donation to the big victory. Report below. pic.twitter.com/lifHAP8R4f
— Mykhailo Fedorov (@FedorovMykhailo) August 17, 2022
As of Wednesday, the Bitcoin blockchain handles an average of five transactions per second (TPS), with fees of about $0.819. Also, the Ethereum blockchain handles nearly 29.3 TPS, with its charges at approximately $1.57. Conversely, visa claims to handle 24,000 TPS with fees ranging between 1.4 and 2.5 percent for each transaction.
A solution for Bitcoin’s lagging TPS could be developing a layer-2 solution (the lightning network) on the Bitcoin blockchain. Also, the layer-2 roll-up technology, like the ZK-rollups, could be Ethereum’s solution to huge fees and long processing times. Nevertheless, most emerging technologies use stablecoins as a medium of exchange.
Mastercard announces partnership with Bitcoin
Following an announcement of a collaboration between Mastercard and Binance (the largest crypto exchange globally), shoppers might soon start using Bitcoin to buy a loaf of bread. The partnership will see the introduction of crypto payments in top street stores. According to the Mastercard CEO, Michael Michach, the partnership will enable Mastercard holders to make purchases with crypto in more than 90 million stores that accept Mastercard payments.
Related: Binance CEO highlights the importance of large market liquidity, discusses crypto regulation
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The first phase of the roll-out will be available for Argentinians. In a LinkedIn post, Michbach wrote that a combination of ease of use and ease of access would unlock blockchain technology’s full potential. He added that bringing crypto to daily purchases is one way to achieve this goal.
Mastercard is already in partnership with Wirex (a UK-based payments platform) to enable Bitcoin payments. Wirex has an operating license granted by UK’s financial regulator (the financial conduct authority, FCA). Mastercard notes that none of its merchants receive payment settlements in digital currencies. Instead, it converts the crypto payments to fiat before settling its merchants.