Cryptocurrencies have come a long way since Bitcoin’s first block was mined by Satoshi in January 2009 with the famous embedded message “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. Fast forward to today, digital assets have gone mainstream, with some countries such as El Salvador recognizing Bitcoin as legal tender – a move that has not boded well with the IMF and other global financial bodies.
The big question in this piece, however, is whether cryptocurrencies have lived up to the dream of being everyday use cases as per Satoshi’s intention to disrupt the centralized fiat currency system. How big is the crypto payment ecosystem? Can I buy eggs or milk seamlessly without withdrawing my crypto funds? These are critical questions in the quest to decipher if crypto-to-fiat spending is still part of the future and the progress made so far by different crypto stakeholders.
Steady But Slow…
Let’s start with the numbers; according to a recent report by Global Market Insights, the crypto payments app market recorded a valuation of $791.8 million in 2023 with projections showing it is likely to grow at a CAGR of 13% between 2024 and 2032 to hit a valuation of $2.34 billion by then.
The crypto card market has been gaining even more traction with 2023 valuations placing it at $10.1 billion; some of the noteworthy players that have contributed to these figures include Crypto.com, Coinbase, Bybit and all-round crypto service providers such as Gleec.
But despite the progress, crypto payments accounted for less than 0.2% of the global e-commerce transaction value in 2022, according to Statista. This further begs the question; What’s limiting the adoption of crypto into today’s payment ecosystems given that a good number are already digitized or advanced enough for seamless integrations?
There are quite a number of factors, most notably regulation uncertainty; while several jurisdictions, including the EU have adopted clear frameworks, we still have leading economies such as the U.S where crypto policies vary from state to state. This makes it hard for innovators to acquire the necessary licenses to roll out crypto services. For instance, Wirex, a U.K-based crypto card issuer had to shut down its operations in the U.S. back in 2021 due to regulatory uncertainty.
Another big challenge is the technicality of crypto usage, only tech-savvy merchants or buyers are comfortable with using most of the crypto payment solutions that currently exist. This coupled with reputational risk of being associated with scams has seen potential crypto users or merchants shy away from integrating or accepting any form of digital assets. For context, crypto alone accounted for roughly 13% of the global cybercrime losses in 2024 totalling to $2.2 billion.
These are just some of the hurdles that are hindering the mainstream adoption of cryptocurrencies as a means of payment. However, on the brighter side, the growth figures over years paint an optimistic future for cryptocurrencies especially at a time when even the strongest fiat currencies, Including the U.S. dollar and Yuan, are facing turbulence as a result of the ongoing geoeconomic wars.
The Adoption of Crypto for Everyday Use
So, how is crypto being used on a daily basis? While the figures may not be as big compared to what the likes of Visa and Mastercard process, it is worth acknowledging the several payment solutions that are being embraced by both merchants and buyers within the global e-commerce market.
At the core, crypto cards such as the one offered by Gleec are proving to be more lucrative for everyday crypto spenders especially those living in countries where credit and debit cards are the norm. This card, for instance, allows crypto users who own BTC or the Gleec utility coin to spend their digital assets anywhere visa is accepted. In addition, the platform also features Gleec Pay which operates as a fully digital bank account with crypto-friendly IBAN.
Another form of crypto payment that is being widely embraced are tap-to-pay crypto payment applications; they follow a similar operational style to that of traditional contactless payment solutions with the only difference being that buyers use their crypto instead of fiat for the in-store payments.
It is also intriguing to observe the rise to crypto payment applications in emerging economies where currency devaluations are a menace when it comes to capital preservation. For example, in Africa, Bitcoin payment applications like Machankura and Tando are making it possible for the unbanked population to not only transact globally but also make payments to local vendors who accept BTC as a form of payment.
“The financial industry is still relatively inefficient. For those who are struggling to make ends meet, the antiquated system imposes high fees and long wait times. Leveraging technology, including crypto and digital wallets, can democratize financial access, making transactions quicker and cheaper.” – noted Dan Schulman, CEO of PayPal, in an interview with TIME.
What Does the Future Hold?
The future of crypto adoption looks bright despite the current market sentiment; for starters, we have a U.S. administration that is pro-crypto and focused on making digital assets accessible to more Americans. This approach by the U.S will likely trigger more jurisdictions to adopt a comprehensive regulatory framework to support crypto usage.
In addition to regulatory clarity, the next era of wealth transfer is likely to set the stage for the full legitimization of digital assets – most GenZ’s have been raised in the age of information, making it easier for them to resonate with crypto assets. That said, it is not going to be a walk in the park given that other emerging technologies such as AI are getting more attention while crypto struggles to remain relevant amidst all the memecoin noise.
