Ross Clark Ross Clark

Are cryptocurrency transactions the future?

Image: Getty

To most of us, cryptocurrencies remain an esoteric world, beloved by nerds and incomprehensible to the rest of us. Does Visa’s announcement this week that it will now process payments directly in a cryptocurrency called USDCoin change that, and hasten us to a day when we will all have cryptocurrency accounts which we use to do our day-to-day shopping?

You don’t need to understand the mathematics of cryptocurrencies and blockchain to work out that the prospect of shopping with crypto is rather concerning for two reasons. Firstly, cryptocurrencies are an unregulated Wild West. While the pound in your pocket is backed by the Bank of England and the pound in your bank account is protected to some extent by Financial Conduct Authority regulations and, failing that, by the government’s deposit protection scheme, who, exactly is in charge of Bitcoin? It is like trusting your savings to a guy sat by the roadside in a banana republic. Secondly, there is the volatility of many cryptocurrencies. The value of a Bitcoin, for example, has gone from $20 to $5 to $60 over the past three years. It is currently worth $59.  Had you been doing your shopping in Bitcoin it would have meant mad periods in inflation and deflation. Between putting your aubergine in your shopping basket and reaching the till it could have changed in price by some degree.

If I lived in dictatorship I might well be more inclined to look favourably on the idea of using a mobile phone-based bank account denominated in a cryptocurrency

This may be a concern if you are thinking of taking up Elon Musk’s offer of buying a Tesla with Bitcoin — I note the company’s US website still quotes its prices in dollars, so that currency is going to define the price you pay.

Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.

Or

Unlock more articles

REGISTER

Comments

Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in