Could we be coming to the point where cryptocurrency is an accepted method of payment? At the moment, there are few everyday people secure in their understanding of digital money. However, with more and more well known payment portals, such as PayPal, investigating crypto, we move closer to it being part of our daily routine.
Why is it such an appealing option? With the constant influence of government corruption, the stability of national currency, known as fiat, is coming under pressure. Where there is instability people look to safer options and in the past this would have been gold. However, as cryptocurrencies such as Bitcoin are decentralised and the value dictated by the whole community, investors are also looking to store money here too. In an unstable financial market, it offers another option to gain some control and a safe haven in turbulent times.
However, the revolution in currency is deeper than this. The ability to move money across borders and transact freely has long been an unfair process. Rich banks in developed countries control the flow of money around the world, making it harder for some that others to use the financial system. Cryptocurrency is a solution to this, democratising the flow of money and providing freedoms that should be a fundamental right.
Freedom to navigate
As the world becomes ever easier to navigate, people want to be able to do this easier. When we seek freedom to wander, we can be frustrated by access to cash. It might be that ATMs are unavailable or that there are few ways to pay for goods. Also, in some countries, it is not wise to wonder around with a massive amount of notes in your wallet.
With a mobile phone and a digital wallet that is freely accepted everywhere, we could experience true freedom. With the likes of Apple Pay and Google Pay it is becoming increasingly simple to swipe your phone or watch and make a payment for the goods. You might be surprised to know that ownership of such devices for payment are at their highest in developing countries. For instance, in Vietnam 97% of adults own a mobile device with 90% and more in countries like Kenya and Columbia. Even in the countries where rates are at their lowest, such as the Philippines, it is still at a surprising 70%.
Why is this mobile device ownership so significant? Well, it becomes sensible for hotels, restaurants and shops to use digital payment methods. While at the moment this is attached to our bank accounts and subject to transaction charges, the future is likely to be crypto wallets – and it might happen in the developing world much quicker than the developed world where the need for such stable funds is more apparent.
An attractive sector
The travel sector is an attractive area for cryptocurrency giants such as Bitcoin and Ethereum. This industry is calculated to be worth around $1.7 trillion annual and is still growing year on year. The scale of travel suggests the demand for a global currency is high and a cryptocurrency is in the best place to make this a reality.
While the rise of such technology seems logical, it will still need the support from communities and governments to make globalised currency a reality. An example of where this is happening is in Queensland, Australia. The town near the Great Barrier Reef called Agnes Water has 40 businesses that accept crypto as payment. Such innovation will need to spread more widely if the tourist in the street is to see this as the best option for their travel money.
The global issue of being unbanked
There are 8 billion people on our planet and 1.7 billion of these people are unable to access a bank. This phenomenon, known as being unbanked, is prevalent in countries such as India and Egypt and in places across the African continent. If you do not have a fiat bank account it becomes almost impossible to participate in the global economy, causing an ever-widening gap between the richer and the poorer nations. Developing countries cannot trade in the world market in such a regime, but with the help of bitcoin they could.
In turn, this democratising of the world economy will give a greater proportion of the world’s population opportunity to travel. In such a future, a growing sector will become a dominant force, and at a time of COVID and restrictions, this boost is much needed. Yet, problems of adoption exist.
A VISA debit card is one way to overcome adoption barriers. These cards can convert crypto to fiat and allow you to make payments everywhere. The more and more these are used, the more competition will exist in the marketplace and the more fees will be driven down.
The possibilities for the future of travel and cryptocurrency seem bright, highlighted by the return of Expedia to this space. Therefore, while the travel sector might be struggling now – it is likely that the rebound impact of our desire to be ever more free will benefit both sectors.