In the near future, Tesla intends to provide an opportunity for consumers to purchase the company's products with Bitcoin. Tesla's policy is keeping pace with the times, recognizing that digital currencies can in fact become a convenient means of payment.
In Form 10-K for the year ending December 31, 2020, filed with the SEC on February 8, Tesla announced that it has updated its investment policy to give itself more flexibility to further diversify and increase the return on its cash, and has acquired $1.5 billion in Bitcoin cryptocurrency. In addition, the company has stated that it plans to start accepting Bitcoin as a form of payment for its products in the near future.
"Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt."
In recent years, Bitcoin has become an investment product, especially after its explosive growth in late 2017. Most investors use it as a store of value, calling it "digital gold,” however there are already many services that allow making payments using Bitcoin and some other cryptocurrencies. For this purpose, separate third-party payment systems were created.
When a client buys a product, he or she pays for it with Bitcoin at the address of a digital wallet (provided by the exchange service). After that, the owner of the wallet converts Bitcoin into fiat and transfers it to the account of the company that sold the product. Thus, payment is made using Bitcoin. For example, AT&T Inc and Microsoft Corp accept Bitcoin through BitPay, a cryptocurrency payment processor.
There are also special payment cards that convert cryptocurrencies into US dollars before a transaction. It is also a fairly straightforward payment method.
Reuters, referring to experts, states that Tesla can eliminate the middleman and create its own processing system that can be used to accept Bitcoin, and liquidate the payments whenever management chooses to. However, for Tesla, this can become an additional obstacle, since in this case, the company will have to have digital coins in its digital accounts at all times.
However, paying with cryptocurrencies is very convenient and easy once consumers try it out. Once Tesla decides on the way in which this will be possible, it will certainly open up even more opportunities for both the company and the consumer.
© 2021, Eva Fox. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.