German bank WEG is paving the way for retailers to begin accepting crypto payments in the year 2020.
WEG Helps Institutions Say “Yes” to Crypto
WEG Bank is owned by both the blockchain firms Nimiq and Token Pay, as well as by the Litecoin Foundation. In an interview, CEO Matthias von Hauff says that the establishment is beginning to accept applications from companies and businesses that are interested in accepting crypto in the future. He says:
You don’t have to be a customer of the bank. All we do is provide the regulatory framework in the background to make sure when the retailer receives crypto. He actually receives fiat in his bank account, if he so chooses.
One of the major problems with cryptocurrency is its vulnerable status to price swings. Recently, bitcoin - which was trading for just over $10,000 USD per unit - fell to record lows and is now trading at just over $8,300 at the time of writing. Every other major cryptocurrency followed suit, i.e. Ethereum, Litecoin, bitcoin cash and Ripple’s XRP.
With such volatility still in play, many enterprises are reluctant to accept crypto as a means of payment. A customer could buy $50 worth of merchandise and use bitcoin, for example, to pay for it. Tomorrow, the price of BTC ultimately goes down, which means that while they’ve still walked off with the products they wanted, the seller loses money.
What WEG is doing is trying to prepare these companies for crypto payments. While they won’t exactly start out accepting ETH or BTC for merchandise, they will have the opportunity to send crypto to their own wallets and ultimately exchange it for cash. This will get these businesses in the right mind frame to begin accepting crypto and prepare them for how said transfers work.
Hauff further explains:
We will not limit ourselves to just point-of-sale terminals. We will do online checkout, ATMs, and we are currently investigating the option to integrate a [crypto] exchange into the bank as well.
The bank plans to start out with both bitcoin and Litecoin. Several other cryptocurrencies, which haven’t been named at press time, will be added later down the line. In addition, the bank is also working on what’s known as the OASIS Initiative, which will boost the bank’s blockchain capabilities.
Some Big Plans Down the Line
Nimiq co-founder Elion Chin states:
What we envision with OASIS is that we are able to create a non-custodial connection between the blockchain world and the traditional bank or bank-account world… This solution will make the on-boarding to get into crypto much smoother. My hope would be that this type of solution would make it smoother, faster, easier, to the point where my parents would get comfortable with it too.
Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries.
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