Few people use cryptocurrencies to pay for everyday goods because the transaction fees are high and merchants don’t accept crypto as payment, but that is changing, Morgan Stanley said in a research report Thursday.
The bank noted that payments company Strike recently announced a partnership with point-of-sales supplier NCR and payments firm Blackhawk Network, which means a large number of U.S. stores and restaurants will soon be able to accept bitcoin. Strike’s planned payment system uses the Lighting Network to process transactions, it added.
Morgan Stanley says partnerships with physical stores are a more important milestone in the “evolution of bitcoin usage as a medium of payment,” as over 85% of sales in the U.S. occur in shops rather than online.
However, the historical volatility of bitcoin-priced goods has deterred digital assets from being used. The bank suggested that merchants might be able to accept crypto either via existing payment terminals or crypto card, which could result in a drop in volatility.
According to the report, crypto is used widely in the digital asset market as a currency. However, ether is mostly needed for the purchase of non-fungible tokens (NFTs). There could be an increased demand to accept crypto as payment method, as more brands are looking to advertise in metaverse.
NFTs are digital assets on a blockchain that represent ownership of virtual or physical items that can be sold or traded.