For all the hype that has come with cryptocurrencies in the past ten years, they have struggled to be used for what they were primarily designed for: buying things.
The volatile price of leading cryptocurrencies such as Bitcoin and Etheruem, coupled with slow transaction speeds and high transaction costs, have largely deterred retailers from accepting blockchain-based currencies in-store.
As such, cryptocurrency has primarily remained outside of the mainstream economy. But there are increasing – if gradual – signs that this may be changing.
One such example is a new initiative that will see some big name retailers accept Bitcoin and three other cryptocurrencies.
Stores such as Amazon-owned Whole Foods, Crate and Barrel, Gamestop and Regal Cinemas, are configuring their digital payment scanners to recognise in-store cryptocurrency payments from Flexa’s crypto app, Spedn.
Commenting on this initiative, founder and senior cryptography advisor of blockchain company temtum Richard Dennis said:
“Cryptocurrencies are part of a movement that will undoubtedly take time but small steps in the right direction are happening on a frequent basis, such as the developments we’ve seen with Spedn & Flexa, who will allow consumer purchases in crypto at major retailers and settlements in fiat for those merchants.”
The project is reportedly in an experimental stage, but early users have reported making successful payments with cryptocurrencies in-store.
Point-of-sales devices for in-store cryptocurrency payments
Regulation has also proven a stumbling block for cryptocurrencies. Crypto-purists feel that it goes against the decentralised ethos of blockchain-based payment, but incidents such as the QuadrigaCX scandal have proven that at least some oversight is needed if crypto is to truly break into the mainstream.
As with every aspect of the financial industry, the point-of-sales devices that merchants use to accept card payments are bound by regulations.
But today, blockchain-based point-of-sales maker Pundi X, announced it received FCC, CE, KC and UAE TRA certifications for its XPOS device to accept crypto payments.
In short, it means the POS – previously earmarked for early rollout in Dubai – now passes regulatory requirements to be rolled out in the US, Europe, UAE and South Korea.
“Today, a blockchain-powered device has officially and legitimately become part of this universe of devices that are improving the quality of life for people everywhere,” said Zac Cheah, co-founder and chief executive officer at Pundi X.
Despite these recent steps, there is still a long way to go before cryptocurrency replaces traditional fiat payments.
Retail initiatives and blockchain-based payment hardware are just one part of the puzzle – the volatility of mainstream cryptocurrencies is still a large barrier to mass adoption.
So-called stable coins – cryptocurrencies pegged to fiat currencies – are one way of solving the problem. The Winklevoss twins have done this with Spedn in the shape of the Gemini dollar, which is pegged 1:1 to the US dollar.
“Mainstream adoption doesn’t come in the form of integration with existing financial products, although it’s certainly the right way to make progress, it will only be realised when merchants can settle their own transactions, peer to peer, feeless and instant,” said temtum’s Dennis.
“This means that legacy currencies such as Bitcoin are still not suited to mainstream adoption and it will be next generation currencies that come forward at speed into this industry.”