Australia has garnered a reputation as an early mover when it comes to emerging tech. We saw it with internet use in the 1990s and with smartphone penetration in the new millennium. In both cases, adoption in Australia was a year or two ahead of the USA and Western Europe, so Australia is seen as something of a barometer. What happens here is an indicator of what is likely to be coming in the rest of the world.
So it is that a sudden trend towards crypto adoption in the Australian retail sector is generating interest, and not only down under. Let’s take a look at what is happening and what is driving it.
OTR leading the crypto charge
The past 12 to 24 months have been a little shaky for crypto, especially in Australia. First there was the fall of FTX, then the big four Australian banks started placing restrictions on crypto payments, then the Australian treasury’s crypto bill crashed and burned. Most recently, Binance has been shaken with the money laundering charges brought against its head honcho Changpeng Zhao.
But look a little closer and you’ll see that all these controversies surround the way crypto is managed, moved, categorized and regulated. Out in the real world, real Australians are living their lives, running businesses and carrying out day to day transactions. They see these issues as details that will resolve themselves in the course of time. What they are more interested in is how they can use crypto to their advantage in today’s economic conditions.
B2C companies can benefit significantly from anticipating a trend and moving first. When it comes to crypto, retail giant OTR has blinked first and is leading the way with crypto adoption in its hundreds of Australian outlets. The company recently announced that its customers can use cryptocurrency to buy fuel and groceries in any of the 175 outlets scattered across Australia. But even this is only the beginning, according to parent company Peregrine, which owns several other retail brands.
For now, it is OTR that is embracing consumer choice. Through a partnership with crypto.com, customers can simply choose crypto at the checkout to be issued with a QR code. A quick scan with their smartphone and the funds are transferred instantly from their crypto wallet to the vendor, where they are converted into Australian dollars.
A trend that could spread rapidly
As mentioned, OTR is not the only brand in the Peregrine retail stable. Other outlets like Krispy Kreme, Chill, Wok in a Box and others are destined to follow. It’s not merely a case of Peregrine going out on a limb, either. The retail giant has gone into partnership with crypto.com and DataMesh on what is clearly a nationwide campaign to transform shopping habits. But smaller retailers are also opening the door to crypto, both online and in the real world.
There are alternatives to going all in with a multi million dollar investment the way Peregrine has. Smaller retailers can simply use a pay-as-you-go payment gateway such as UniPayment to achieve the same effect for minimal outlay. It gives consumers the same opportunity to pay with crypto, including the more popular stablecoins, so USDT transactions and the like are possible as well as Bitcoin, Ethereum and so on.
Vendors do not even need to have their own digital wallets, as the gateway can just exchange the crypto for fiat and pay the remittance directly into the vendor’s Australian dollar account. That way, sellers are protected and the amount they receive is the amount written on the price tag or rung up on the till when the customer is at the checkout.
What is driving the crypto rush?
We mentioned at the outset that crypto has been around for 15 years now, and that the past year or two have been dogged with controversy. So what is driving the current crypto craze? Researchers have set out to answer that question, and it seems there are a number of factors in play.
One is simply a case of knowledge. People have a better understanding of cryptocurrency today than they did five or even two years ago and are more cognizant of its benefits. These include security, speed of transaction, transparency, confidentiality and other factors.
Another is the recent emergence of stablecoins. No longer a novelty or an experiment, Tether is now one of the top three cryptocurrencies in terms of market cap. It presents a solution to one of the biggest problems that was holding people back from adopting crypto – the legendary volatility of Bitcoin and most conventional altcoins.
Nobody is going to forget that Bitcoin dropped from more than $67,000 in November 2021 to $15,000 less than a year later, and this time last year, there were reputable forecasters predicting that it would hit $100,000 in 2023. In short, it is still as unpredictable as the British weather. That might make a fun ride for traders who have sufficient risk appetite, but it is not going to have most people abandoning their fiat currencies in favor of Bitcoin any time soon. Ethereum tracked similarly to Bitcoin during 2022, dropping from $4,800 to about $1,100 and it was a similar story with other altcoins.
2024 could be a watershed
Stablecoins have been an important factor in driving crypto adoption among consumers. Survey data gathered by PureProfile shows that more than 50 percent of both consumers and retailers are in favor of crypto transactions, and crypto gateways like UniPayment and DataMesh make it easy and painless for both parties.
Does that mean 2024 will see mass adoption across Australia, leading to a similar pattern across the globe? It’s possible, but it would take a brave commentator to predict it with certainty given the unpredictable history of the crypto market. We can certainly say it is going to be an interesting year for Australian retail, and the rest of the world will be looking on in curiosity and fascination.