Cryptocurrencies are less preferred to pay for everyday goods because of high transaction fees and merchants don’t accept crypto in payment, but that is changing, said Morgan Stanley in a research report Thursday.
A number of U.S. stores and restaurants will soon be able to accept bitcoin payments after Strike recently announced a partnership with point-of-sales supplier NCR and payments firm Blackhawk. It added that Strike plans to use the Lighting Network for its payment system.
According to Morgan Stanley, partnerships with physical stores are more important to 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.
With the Lightning Network, a bitcoin transaction uses almost no fees, making it a more practical method for making small payments, which would normally be made using a debit card.
The historical volatility of goods priced in bitcoin has deterred consumers from using the digital asset, but the ability of merchants to accept crypto, either at exit payment terminals or through crypto cards, could lead to a drop in volatility.
Crypto is already widely used as a currency in the world of digital assets, the report said, adding that ether is largely used to buy non-fungible tokens (NFTs). In a metaverse where more brands advertise, more payment methods, including crypto, may become necessary, the report said.
An NFT is a digital asset on a blockchain that represents ownership of a virtual or physical asset that can be sold or exchanged.