The travel and tourism industry is a significant part of the global economy. According to the Economic Impact 2019 report from the World Travel and Tourism Council, the industry accounted for 10.4% of the global gross domestic product and provided employment for approximately 319 million individuals around the world two years ago. From 2014 to 2018, it was responsible for one-fifth of all the global net jobs created.
As of 2014, the average annual growth of the global travel and tourism industry is 1.5%. Although the COVID-19 outbreak has given the industry a bad start in 2020, the latest coronavirus pandemic has been just a slight hiccup.
Once the disease is controlled and the social panic that comes with it dissipates, no non-war-related threat could weaken the wanderlust of 21st-century citizens of the world.
One reason why the travel and tourism industry is far from plateauing is the emergence of cryptocurrency. Bitcoin was born more than 10 years ago and is now part of the everyday financial lexicon. While Bitcoin and other popular digital assets have been mostly referred to as speculative investments only, crypto is slowly beginning to resemble real money.
The financial observers at SpendMeNot noted that over 120 merchants now accept Bitcoin. Many of them belong to industries, such as food and beverages and payment services, that support the travel and tourism industry.
The Crippling Case of Cash
More and more people are warming to the idea of spending a cryptocurrency instead of cash. After all, physical money has already become less appealing with the advent of digital wallets and payment platforms. Cash may be a safe haven in itself on certain occasions, but its inflationary, unhygienic, and untraceable nature can be off-putting.
Furthermore, the scarcity of automated teller machines in less developed countries can limit the purchasing power of loaded travelers when there is no easy access to cash. The shortage of merchants that use payment gateways to process debit card and credit card payments also make it difficult to shop and pay for services.
The use of smartphones and digital currencies is the most feasible solution to the usual cash nightmares that tourists face. Unlike fiat currencies that generally have to be converted to the local currency of the host country, cryptocurrencies could be spent (in theory) across international boundaries.
The ability to use a universal token without having to take the time to rush to money changers or ATMs is something dreams are made of.
It could become a reality sooner than expected since the smartphone penetration rate in the developing world is amazingly high. For instance, 97% of the adult population of Vietnam, one of Asia’s most visited gems, owns a smartphone.
The beauty of crypto is that it does not alienate the unbanked. Opening a digital wallet does not require any bank account, thus enabling marginalized merchants to embrace digital transformation and accept more payment options more easily.
Crypto for the Masses
Coinbase, one of the best cryptocurrency exchanges in the world, is the newest Visa principal member. The firm’s newfound affiliation with the payment giant gives it the power to issue crypto debit cards without the help of a third party.
Coinbase’s strategy is unclear at this point, but the company is likely to issue cards to cryptocurrency users who want to leverage Visa’s far-reaching infrastructure.
The idea of a crypto card is not new. It was introduced in 2014. The current state of global Bitcoin adoption, however, indicates that the concept has not taken off.
But the Coinbase news could be the break some crypto circles have been waiting for to finally elevate digital currencies to the status of cash as a mainstream medium of exchange for day-to-day purchases.
Coinbase’s Visa crypto debit cards would mean that merchants do not have to upgrade their payment infrastructure to accept crypto. Also, holders would no longer have to manually convert their crypto funds to fiat money when they make a reservation with a travel agency or pay for a meal.
Moreover, the volatility of cryptocurrency prices is no longer as big a concern as it used to be. The growing number of stablecoins on the market allows anyone to fill their crypto wallets with more reliable digital currencies.
In the near future, ordinary consumers may not need to use crypto exchanges to have digital currencies anymore. Some professionals are already getting paid in crypto.
In addition, some banks have begun offering Bitcoin investment options, too. Such a development is proof that the financial system is undergoing an overhaul to make room for crypto-related products and services.
Crypto tourism is not just gaining steam, but it is also evolving. Sooner or later, the rich and the tech-savvy will lose their virtual monopoly on cryptocurrency. If the day when ordinary vacationers can use crypto cards even in remote destinations finally comes, the global travel and tourism industry will see more prosperous years.