There are some practical issues standing in the way of cryptocurrencies for use in everyday life. For example, can you reserve a hotel room with crypto? This issue came to the mind of this writer while booking a hotel room. One of the selling points when booking via a VISA card through Expedia was that the cost of the room was 100% refundable up until 24 hours prior to the hour of checking in. Crypto transactions are, however, irreversible.
Not Enough Merchants Have Adopted Crypto
Something that has slowed the crypto adoption by the business world is the fact that most merchants do not accept crypto payments. This includes hotels. That being the case if a person wants to use crypto to book a hotel room they need to convert it to the local currency and pay with that currency. Transmitting value around the world with crypto currencies is easy. Converting to Colombian pesos, Costa Rican colons, or Brazilian reals may not be.
Crypto Transactions Are Permanent
When you buy something online and it arrives damaged you can commonly get your money back. This is typically the case when you buy using American Express, VISA, or MasterCard. In order to get a refund using crypto you need to have a second transaction. In the meantime the value of the cryptocurrency that you used may have gone up or down causing the other party to discount your return payment. The best choice for making crypto payments is to use a stablecoin like Tether so that your dollar value does not waiver from moment to moment.
When the Merchant Expects Their Currency to Fall in Value
It was nearly thirty years ago in Puerto Vallarta, Mexico that the elegant Chez Elena restaurant offered a substantial discount on their meals if you paid in American dollars instead of Mexican Pesos. That was because the Mexican peso was steadily losing ground versus the US dollar. The owner of the restaurant catered to American tourists. They were also speculating in the Forex market with their meals being discounted for payment with the dollar. This approach might have worked for crypto a couple of years ago when crypto peaked and everyone wanted a piece of the action. It would have encouraged merchants to accept Bitcoin and the rest of the cryptocurrencies in the belief that these forms of money would gain value over the dollar. It would not work today when everyone is skeptical about where crypto will end up when regulation is fully in place. This is just one of the reasons why you typically cannot book a hotel room using cryptocurrencies.
Payment With Stablecoins Versus Dollars
The reason that people buy, sell, and either loan or take out loans with stablecoins is that they are tied to the US dollar. This solves the issue of rising and falling crypto value. However, it does not solve the issue of acceptance by merchants or hotels. We wrote some time back about crypto versus VISA. VISA and other credit and debit cards are very efficient and accepted pretty much everywhere. Crypto needs to solve the convenience issue before it can work like VISA and allow for payment in dollars. Otherwise, one might as well pay with dollars and forget crypto.
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