El Salvador made headlines in 2021 when it adopted Bitcoin as an official currency, briefly making it the darling of the tech community. Fast forward a year or so, and the actual landscape for Bitcoin in El Salvador is very different to how it was expected. The headline-grabbing move hasn’t had the desired effect – the government’s Bitcoin holdings have lost 60% of their value in the recent crash, and Salvadorians haven’t used it as widely as had been hoped.
That hasn’t derailed the industry's desire to go mainstream in the UK. Plenty of major retailers already accept Bitcoin as payment for goods, with stores common to the UK High Street among them. For instance, Argos, John Lewis and Marks & Spencer are staples of the UK retail industry, and all accept Bitcoin as payment for gift cards, although crucially, not for goods.
Is the UK on course for crypto adoption at the tills? Or is it a pie-in-the-sky dream for the tech industry, something much further away than some might prophesise?
Crypto Is Here To Stay
A recent survey of 250 UK companies suggested that confidence in crypto was growing, despite the 2022 crash – 67% said they’d recommend using crypto to their clients and customers. The general consensus was that we’d see mass crypto adoption within the next ten years. “In the last few years, cryptocurrencies have moved from the outskirts of the financial ecosystem to find themselves front and centre of mainstream investing, with many of the largest trading venues in the world now catering to both retail and institutional crypto needs,” said Julian Sawyer, CEO of Bitstamp. He explained that crypto had now passed the point where it was trying to survive and moved into the evolution stage.
That points to crypto making its presence felt on the High Street, but what would that look like in real terms? As Bitcoin and other cryptocurrencies have no physical presence, how would we conduct transactions?
What Would Crypto In Retail Look Like?
The physical manifestation of crypto in retail wouldn’t actually be all that different. Transactions at the till are currently carried out in one of two ways: cash or using card machines. Today’s card payment machines are not just able to accept chip and pin, but are also contactless. Furthermore, many take various digital payments, such as Apple Pay or Google Pay. This involves tapping your phone or watch on the screen in the same manner as you would your debit card.
In terms of cryptocurrency, there’s little precedent to how it would work, but Apple Pay and the like feel like a blueprint. Whilst El Salvador did instruct many vendors to accept Bitcoin, the outcome was varied – some had Lighting full nodes, whilst others claimed to accept Bitcoin but didn’t have internet access. However, it is not hard to envisage a simple payment app offering Bitcoin as a payment method in the same manner as PayPal does right now.
What Are The Drawbacks?
The obvious drawback is the amount of different crypto out there. Retailers would have to have access to the latest values, and understanding how much your shopping costs in Bitcoin, Ethereum or Dogecoin, for instance, could be tough. Shelf edge labelling wouldn’t be accurate, and it would be very much up to the individual to ascertain how much their goods could cost in their chosen crypto.
Also, using facilities such as Apple Pay relies on an internet connection, and to a degree, the same goes for mobile card readers. Whilst a national business in London might benefit from superfast 5G internet, the same branch operating the same technology in a small provincial town may suffer. Also, some towns and cities have internet blackspots, and some buildings don’t have good WiFi – those places couldn’t adopt crypto payment.
Finally, regulation will have to tighten for crypto to be widely adopted. Whilst the crypto industry is here to stay, many people in the UK still do not know what crypto is or how to use it. For crypto to be widely adopted on the High Street and for enough people to wish to use it to warrant companies spending on new technology, there would have to be more trust in the industry, which took a hit in the wake of the recent crash.