October 16, 2023 at 11:53 GMTModified date: October 16, 2023 at 11:54 GMT
October 16, 2023 at 11:53 GMT

Ferrari opens doors to crypto payments in the US

Luxury sports car manufacturer Ferrari has started accepting cryptocurrency payments in the US.

Ferrari opens doors to crypto payments in the US

Luxury sports car manufacturer, Ferrari, has started accepting crypto payments in the US.

The decision to jump into the cryptocurrency bandwagon comes in the light of rising demand from Ferrari’s investor customers. The firm’s chief marketing and commercial officer, Enrico Galliera, told Reuters: “Some are young investors who have built their fortunes around cryptocurrencies. Some others are more traditional investors, who want to diversify their portfolios.”

Plans to extend the service to Europe have also been revealed by the executive. This is aimed to be done by the first quarter of next year, after which other regions will also be considered where crypto is legally accepted. According to Galliera, interest in the brand is almost the same in both the US and Europe.

The latest move has been made possible via Ferrari’s collaboration with crypto payment processor BitPay. Payments made in Bitcoin ($BTC), Ether ($ETH) and $USDC will now be accepted in the US.

Other providers might be used in different regions, as per what is convenient. These payment processors ensure the legitimacy of the crypto payments and checks whether they are not related to any criminal activity or potential tax evasion.

Since cryptocurrencies are notoriously known for their high price swings and fluctuations, BitPay will immediately turn Ferrari’s crypto payments into fiat currencies. This approach will mean that the firm is “shielded from their wide fluctuations”, said Galliera. There would be no change in prices, no fees, no surcharges too.

As per the executive, a majority of the car dealers in the US have already signed up or are in favour of accepting the cryptocurrency payment scheme.

A similar route was taken by American electric car manufacturer, Tesla, which started accepting Bitcoin payments in 2021 until it took a U-turn just a few months later, citing environmental concerns.

As announced by its founder, Elon Musk, the company would consider opening Bitcoin payments again only if the network’s mining became at least 50% renewable. Talking about Bitcoin’s high energy consumption, Musk had said: “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”

In September this year, Bloomberg analyst Jamie Coutts, noted that Bitcoin has surpassed this threshold. However, Tesla has not taken any action in this regard since then.

On the flip side, Tesla’s Q2 2023 earnings report revealed its commitment to Bitcoin as it maintained its current holdings with no new buying or selling of $BTC during that quarter.

This was despite last year’s second quarter, when it sold more than 30,000 Bitcoin, which was roughly 75% of its holdings, for $936million. Its first purchase, of about $1.5bn worth of Bitcoin, was made in early 2021.

Ferrari, on the other hand, believes cryptocurrencies to have made efforts to reduce their carbon footprint. This has been made possible through the introduction of new software and a larger use of renewable sources, said Galliera. He also confirmed the brand’s target to reach for carbon neutrality by 2030 along its whole value chain.

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