Even though the cryptocurrency market seems to be going through a bit of a lull at the moment, there’s no denying the fact that the industry has grown from strength to strength over the last few years, especially from an adoption perspective. 

To this point, a recent study revealed that the number of adults in the United States using digital assets for everyday purchases will increase by 70% by the end of the year when compared to 2021, with the metric rising from 1.08 million to 3.6 million users.

The study’s chief author suggests that as the crypto market’s volatility continues to reduce — thanks to the growing use of stablecoins and central bank digital currencies (CBDCs) — more and more people will look at these offerings as a legitimate means of payment. In fact, by the end of 2022, the research suggests that the total population of U.S adults making use of crypto will scale up to a staggering 33.7 million.

By the end of 2023, this number could potentially climb to 37.2 million, a figure that is quite realistic, especially when considering the fact that investors entering the global crypto fray have nearly doubled across different countries like India, Brazil and Hong Kong within the last 12 months. On the subject, Narek Gevorgian, CEO and founder of CoinStats — a crypto portfolio manager and decentralized finance (DeFi) wallet — told Cointelegraph:

“Crypto is taking a front row seat within the financial mainstream in many cases, not in a zero-sum way versus the existing established market. Millions of unbanked people have access to cryptocurrency transactions from their mobile phones, and due to this being an untapped market, it is hard to observe and measure its growth from the economic lenses we have in place today.”

Crypto adoption in retail primed to grow

Max Krupyshev, CEO of crypto payments processor CoinsPaid, believes that while the aforementioned figure of 3.6 million is quite impressive, it still represents just around 1% of the American population. In his opinion, there is going to be exponential growth in cryptocurrency payments within the next 3-5 years, adding:

“I think we will be able to talk about tens of millions of users in the United States alone by 2025. The American market is a fertile ground for any innovative solutions. Another factor driving crypto’s adoption as a day-to-day transactional currency is that it is becoming increasingly easier to buy, spend these assets with global brands.”

He further stated that when it comes to crypto payments, Asia has the potential to overtake America in the long run since the region as a whole is quite flexible when it comes to accepting novel and upcoming technologies. “We should also pay attention to the growing popularity of cryptocurrencies in African countries. There is a great demand for crypto apps and alternative investment tools offering a low entry threshold,” Krupyshev added.

Brandon Dallman, chief marketing officer for DeFi ecosystem Unizen, told Cointelegraph that for the longest time the retail payments/cross border remittance ecosystem was ruled by a select few players like Western Union, PayPal and Stripe. However, with the rising popularity of crypto in recent years, digital assets have helped people circumvent issues related to middlemen and high fees, as well as the inherent inhibitive red tapism associated with the traditional finance economy. He highlighted:

“Fast blockchain networks are suitable rails for CBDCs like the digital dollar, euro etc. The blockchain that is able to cater to the demand put forward by financial institutions like stock exchanges and clearing houses will win the battle. We are seeing banks of all sizes dip their toes in the water to see how they can start to interact with the new digital world in front of them, driven by a growing fear of being left behind.”

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Maybe not?

Not everyone is convinced about crypto’s growing clout within the retail segment. For example, Ben Caselin, head of research and strategy for cryptocurrency exchange AAX, told Cointelegraph that while we may see the adoption of custodied stablecoins in the near future, it’s highly doubtful that we are headed toward some kind of crypto payments utopia, adding:

“With increased integration, we can expect more vetting and regulation which will not bode well at all for crypto. There might be some venues where particular tokens may be the currency of choice, for example, a Bored Ape-themed restaurant is likely to accept payments in ApeCoin. But, other than that, I’m of the view that ultimately, real world payments and store of value utility will converge on Bitcoin, although this does not discount the continued growth of online and offline micro economies.”

Nonetheless, Caselin said it’s encouraging to see the mainstream move toward a better and more open understanding of what money really is. “If we can see merchants or corporations actually holding the crypto assets they’re paid with, then this could get very interesting,” he noted.

Which digital assets are suited for retail? 

As things stand, Dallman sees Solana 

SOL

$16

 as a frontrunner when it comes to facilitating everyday transactions because the network offers fast speeds and extremely cheap gas fee rates, making the network more accessible. Furthermore, with major cryptos like Bitcoin 

BTC

$17,269

 beginning to find mainstream adoption as legal tender, he sees the flagship asset gaining more popularity as a digital payment medium.

A similar opinion is shared by Krupyshev, who believes that Bitcoin, rather than any stablecoin, will become a more popular means of payment even though most products or services have their values denominated in U.S. dollars, adding:

“I consider Bitcoin the most likely candidate for the role of a global payment medium. It has already proven its vitality, having overcome more than one crisis and survived more than one crypto winter.”

That said, he conceded that it is highly unlikely that we will see the mass implementation of BTC-centric payments over the next couple of years. This is thanks, in large part, to the fact that production costs are still paid in fiat currencies and are usually tied to either the U.S. dollar, euro, British pound, yen or yuan.

For Gevorgian, Bitcoin and Ether 

ETH

$1,333

 seem to be two of the most likely candidates for global retail adoption, thanks to their market dominance and popularity with investors. “Bitcoin seems to be working for larger transactions, and slowly but surely it will become a more viable option for smaller transactions with the advance of solutions built on top of the Lightning Network,” he added.

He further suggested that the most promising cryptocurrencies to gain ground in the payments arena will be those that are the most held and used. This will likely see the top-20 largest coins by market cap prevail as transactional currencies.

Contrary to the opinions listed above, Yair Testa, head of business development for blockchain-based payments ecosystem COTI, has no doubt in his mind that stablecoins will be the number one choice for retail remittances in the near future. He told Cointelegraph:

“Enterprises and merchants need to use a great portion of their revenue in order to cover their operational costs and can’t afford the risk. They need stability and assurance that their revenue will have the same value tomorrow as it does today. We see regulated stablecoins and CBDCs as the leading payment method in the long term.”

Mainstream entities accepting crypto

With crypto assets accruing a lot of mainstream support in recent years, the list of famous brands accepting digital currencies has been growing at a furious pace. For example, Microsoft currently allows its users to pay for its various in-house services — including Xbox Live, Microsoft apps, games, etc. — via Bitcoin.

Overstock, an American internet furniture retailer, seems to be leading the roost when it comes to crypto shopping. This is because the company currently accepts a number of digital tokens alongside Bitcoin such as Litecoin 

LTC

$81.11

, ETH and Monero 

XMR

$160

. Similarly, Home Depot, the largest hardware store chain in the United States, allows Bitcoin payments via Flexa’s checkout system — a crypto payments ecosystem backed by Gemini — thus making it possible for individuals to build an entire home using just crypto.

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Starbucks has also partnered with futures exchange Bakkt, allowing users to pay for their morning cup of coffee (and much more) using digital assets. The same is also true for American multinational supermarket chain Whole Foods, which recently partnered with spending app SPEDN, allowing users to buy all of their groceries using BTC, LTC, or the Gemini dollar (GUSD). SPEDN is not just relegated to Whole Foods since it also allows users to spend their digital holdings at Regal Cinemas, GameStop, Jamba Juice and Baskin Robbins.

On the telecoms front, AT&T is the first American mobile phone provider to offer its clients crypto payments, albeit indirectly. Using BitPay, a third-party payment gateway, users who want to avail of the company’s various offerings/services can do so using Bitcoin as well as a few other assets.

Apart from the names listed above, some other prominent brands that currently take crypto payments include entertainment firm AMC, travel booking operator Travala, American department store franchisee JCPenney, the Dallas Mavericks NBA team and GameStop, among many others.

As we head into a future where digital currencies continue to increase in popularity at a rapid rate, it will be interesting to see how crypto fits into the global retail landscape, especially in terms of either competing or complementing the existing fiat payment system that is in place globally.