Aussies paying bills with bitcoin doubles in 2021
Bitcoin has come to be seen as ‘digital gold’ for this generation of investors. Now, it’s increasingly being used as a payment method, not only in El Salvador, but in Australia too. This is much more than a gimmick, as tech companies are overtaking Australia’s big four banks and paving the road for bitcoin to become a nationwide currency.
“I’ve hardly used fiat for the last 18 months, using a credit card as an interim solution for day-to-day expenses, and then using Cointree’s crypto Billpay feature to pay my credit card, mortgage, and various other bills,” says a customer of the Melbourne cryptocurrency exchange, Cointree. Like many in the cryptocurrency space, this user wants to keep his identity anonymous to protect his privacy.
“It started off as an exercise to promote blockchain as a use-case and has since become my primary payment, which I like because I’d like to live as decentralised as possible,” he says.
Many crypto proponents believe that decentralisation can keep a monetary system fair and honest, which is especially valuable in countries like Venezuela and Nigeria that have had their currencies wiped out.
“The technology is great because you can’t corrupt the ledger, which reduces dishonest behaviour for the betterment of the world,” he says. Still, there’s still a need for exchanges like Cointree to act as a bridge between cryptocurrencies and fiat currencies like the Australian dollar.
“We support people who want to pay their bills with crypto and live as decentralised as possible,” says the CEO of Cointree, Shane Stevenson. “Many of our customers are incredibly passionate about blockchain technologies like Bitcoin and Ethereum. As people say in crypto, they come to get rich but stay for the revolution.”
There’s no doubt that Australians are looking to get rich with cryptocurrencies. As the Australian Financial Review reported, over four million Aussies are set to invest in digital assets over the next year. But do they really want to pay their bills with bitcoin?
“Absolutely. We’ve seen our own customers increasingly pay their bills with bitcoin and other cryptocurrencies. Since January, we’ve already processed almost twice as many bills as we did the whole of last year. Usage has increased 98% and it’s only August,” says Shane Stevenson.
“We’re not the only Aussie company that has seen a huge growth in demand,” he continued. “The Living Room of Satoshi also helps their users pay their bills with cryptocurrency. They’ve now processed more than 200,000 bills for over 18,000 customers.” With competing companies moving into Australia, that number could grow exponentially larger.
In Australia’s biggest buyout ever, the Australian fintech company Afterpay was recently purchased by the US payments company Square for AU$39 billion. With a dual-listing on the ASX, Square’s market cap isn’t only bigger than the banks, they’re now the second-largest company on the ASX.
This doesn’t only pave the way for Square to grow in Australia, it paves the way for Aussies to adopt bitcoin as a primary payment method. Before the buyout, Square’s point of sale devices were already popular among Australian SMEs and their revenue from bitcoin sales had doubled over the past year. Now, they have Afterpay’s Australian Millennial and Gen Z customer base.
“They’re perfectly positioned to drive mass adoption of bitcoin as a payment method in Australia. All they need to do is combine their point of sales tools, bitcoin payment channels, and crypto-friendly customer base,” says Shane Stevenson.
It’s no secret that Square’s CEO has a big vision for bitcoin. “The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin,” Jack Dorsey told The Times. This would happen “probably over ten years, but it could go faster”.
The growth of bitcoin as a payment method is hardly an Australian-only phenomenon. AMC Theatres in the US recently announced that moviegoers will be able to pay for movie tickets and popcorn with bitcoin by the end of the year. They now join the ranks of Microsoft, PayPal, Subway and Wikipedia who are accepting bitcoin as payment. Tesla was also accepting bitcoin as payment for their cars earlier this year, but have temporarily reversed that decision until they see stronger data on Bitcoin miners using clean energy.
Across the Atlantic, the leading opposition party in Spain, Partido Popular (PP), has introduced a bill that would allow for the payment of mortgages with cryptocurrencies. Along with homeowners paying their mortgage, the bill would allow institutional funds to use cryptocurrencies to invest in mortgage pools. Of course, the most famous international example of bitcoin adoption is in El Salvador.
El Salvador was the first nation state to adopt bitcoin as legal tender. It all began in 2019 with a project known as ‘Bitcoin Beach’, where the small tourist town of El Zonte began accepting bitcoin as a payment method. The success of the project encouraged El Salvadorian President Nayib Bukele to adopt bitcoin as legal tender across the nation.
While ‘Bitcoin Beach’ makes a great story, there was likely a more pragmatic motivation. Shane Stevenson believes that, “With remittance payments accounting for 23% of the nation’s GDP, the deciding factor was surely bitcoin’s faster and cheaper payment network. Thanks to the Lightning Network, it costs almost nothing to send bitcoin internationally.”
The Lightning Network is a Layer 2 protocol for scaling the Bitcoin network with fast, cheap, and private transactions. So named because it processes transactions at the speed of light, it’s designed to compete with payment networks like Visa.
“The number of bitcoins held on the Lightning Network has more than doubled from 1,053 to 2,280 since the start of the year. Not only will the exponential network growth drive adoption of bitcoin as a payment method across countries like Australia, it will effectively give billions of people in developing nations their first bank account. El Salvador is only the beginning,” says Stevenson.
“In the past decade, bitcoin has grown to become digital gold. If this exponential growth of the Lightning Network continues over the next decade, along with payment channels from the likes of Square and Cointree, bitcoin could grow to become a global currency that’s used for everything from paying your mortgage to buying a cup of coffee.”
