Satoshi Nakamoto envisioned bitcoin as a peer-to-peer version of electronic money, one that could exist without any centralized third-party oversight. Today, bitcoin is one among the hundreds of available cryptocurrencies. Although Bitcoin has gained traction among trading speculators, many corporations and individuals are investing in blockchain technology with an eye to the future. Retail acceptance will be the most visible trend in this respect, especially in countries using cryptocurrency rather than fiat.
Using cryptocurrency for retail is already gaining steam as it offers several potential benefits to those involved with retail goods. Among these are payment security, non-reversibility of transactions, no transaction size limits, and lower exchange fees. Although mass adoption of cryptocurrency remains its infancy, multiple retailers are stepping up to accept cryptocurrency. Microsoft, Shopify, Overstock, Newegg.com, and Expedia have heavily promoted their willingness to do so.
A report by Eaton-Cardone, CIO of Global Risk Technologies, notes that 78% of retailers are inclined to adopt cryptocurrencies by 2023. It also reveals that the retail market for cryptocurrencies will grow from $80M to $2.3B within that time, a compound annual growth of 96.4%. In this article, we describe how Turkey and Venezuela are using cryptocurrency, and why higher adoption rates have started to occur in other countries using cryptocurrency.
After President Trump imposed heavy tariffs on aluminum and steel exports to Turkey, the President of Turkey called on his citizens to convert US Dollars and Euros to Lira, the local Turkish currency. Not incidentally, Turkey was also excluded from SWIFT, the global banking system for international transfers. As a result, the Lira’s value declined steeply, encouraging
In 2018, President Maduro of Venezuela introduced a cryptocurrency called Petro. The cryptocurrency was created to bypass the sanctions imposed by the US and to access international finances. Unfortunately, its popularity remains limited and it has failed to save Venezuela’s declining economy. However, more Venezuelans became aware of cryptocurrencies as a result. While one might imagine bitcoin would be a popular alternative, its transaction fees equate to about a month’s salary in Venezuela. Instead, many Venezuelan retailers have adopted NANO as a cryptocurrency, given that it is fee-less and generally transfers in two seconds.
“I got it (0.5 Nano) from someone who helped me in my current situation, currently living in Venezuela. 0.5 nano is almost one entire monthly salary in my country. It’s more than I made last month. I’ve been doing quick research into this cryptocurrency, and it fits very well for my entire country, I’m going to read more about this, and hopefully, I’ll tell about nano to friends who would want to use it.”
In both Turkey and Venezuela, the respective governments gave the call to adopt alternate currencies. With official support, this call inevitably led to higher retail adoption of cryptocurrencies. As cryptocurrency use gains in popularity, expect retailers in other countries using cryptocurrency to follow suit. With any luck, retailer acceptance of cryptocurrencies may experience a snowball-effect. Indeed, newer technology coupled with amicable laws and regulations is already setting the stage to make this happen.