Payment Processors Shift Crypto Risk To Consumers

Little by little the staid financial industry is moving to acceptance of cryptocurrency.

The current idea is to try to derisk the transaction but make it easier for the general public to use digital assets, primarily Bitcoin, to pay for things.

The risk, of course, is in the volatility.

If the US Dollar swung in value by 20% in a day, then this issue would be normalized.

But, with Bitcoin, the paying for a $4 Starbucks caffeine fix today, might result in the recipient getting $4.80 or $3.20.

But mainstream payment processors PayPal and VISA are starting to let customers pay using their crypto while paying the merchant in fiat dollars.

The secret is the use of stablecoin.

The Wall Street Journal reports that “… Visa will let Crypto-dot-com settle its Visa debit-card obligations through the ethereum blockchain with U.S.-dollar-denominated stablecoin.”

And PayPal uses the Paxos crypto exchange to swap out the payments for dollars.

These methods apparently shift the valuation risk to the buyer who will also then be responsible for Federal income tax if the value paid is greater than the cost to purchase the Bitcoin.

https://www.wsj.com/articles/payments-companies-are-playing-hide-the-crypto-11617184800

Source: https://jeffkoeppel.wordpress.com/2021/04/01/payment-processors-shift-crypto-risk-to-consumers/

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