When crypto crashes, what happens to crypto payments?

Back in 2008, the folks who created Bitcoin envisioned it as a ‘peer-to-peer electronic cash system.’ About 14 years have passed since, but payments is a use case that has fallen far behind speculation when it comes to crypto-assets like Bitcoin. Just last week, Sam Bankman-Fried, the founder of crypto exchange FTX The Financial Times that Bitcoin has no future as a payments network. Despite the limited success and overarching doubts expressed about the feasibility of crypto payments, some merchants in Singapore want to get in on the action. Luxury car distributors, footwear and accessories retailers, and a hiring consultancy are among businesses keen to accept crypto payments in the country. One simple reason is that they want to attract heavy-spending clients who made a quick buck off of crypto markets and are keen to spend some of it. Another reason, in their opinion, is the relatively faster settlement time crypto-assets offer. But those upsides come with the caveat that these assets are notorious for their volatility, and there is no way to reverse a transaction on a blockchain—the computer systems crypto-assets operate on. During a turbulent week, a US$5 cup of coffee could cost vastly different amounts of crypto, and there is no way to cancel a payment made by error. Even though people in Singapore seem more inclined to interact with crypto assets than people in other countries, crypto payments continue to be a niche thing. While payment categories like cross-border payments represent a use case where using crypto assets could cut costs for all involved parties, few companies have figured out how to present people with the option in a user-friendly and regulatorily compliant way. In today’s story, Our correspondence Sheela Shelar looks at the rocky road that crypto payments are treading in Singapore and what it will take for them to overtake a well-functioning payments system already in place.