The demand for using cryptocurrencies as a payment method is declining as the market has lost about $2 trillion in value since its peak in April, according to JPMorgan, one of the world’s largest banks.
JPMorgan’s global head of payments, Takis Georgakopoulos, said in a Bloomberg Television interview on Tuesday that the bank saw a lot of demand for crypto payments from its clients until six months ago, but not anymore.
“We see very little right now,” he said, adding that the bank is still offering the service for those who prefer to use crypto for payments.
Georgakopoulos attributed the drop in demand to the volatility and uncertainty in the crypto market, which has seen many exchanges lose volume and some digital asset firms collapse.
He also said that crypto is becoming more popular in the traditional gaming space and the metaverse, where there are new opportunities for using digital tokens.
Crypto Payments Still Have Potential, Some Say
Despite the current situation, some crypto enthusiasts and companies still believe that cryptocurrencies have the potential to become a mainstream payment method in the future.
According to a recent PYMNTS study, 27% of crypto-owning consumers indicated they “probably” or “definitely” prefer shopping at merchants who accept crypto. People want the option even though the ease of use due to volatility and even shoppers’ mindsets is still in the making, PYMNTS reported earlier this month.
Jack Dorsey’s Block, formerly known as Square, is one of the proponents of crypto’s promise as a means of payments. The company has been offering bitcoin transactions through its Cash App and has recently announced plans to build a bitcoin-focused decentralized exchange.
However, Block has also seen a downturn in crypto payments. It collected $1.79 billion in bitcoin transactions in the latest quarter, down 34%, Bloomberg reported.
JPMorgan Continues to Embrace Crypto Space
JPMorgan, meanwhile, is not giving up on the crypto space. The bank has been exploring various ways to leverage blockchain technology and digital assets for its business and clients.
The bank recently became one of the main backers of Ownera, a startup that aims to bring trillions of dollars of tokenized assets to the decentralized finance (DeFi) sector.
The bank has also been testing blockchain for collateral settlements and offering crypto exposure to its wealthy clients.
JPMorgan was one of the first major banks to launch its own digital currency, JPM Coin, in 2019, which is used for cross-border payments and other purposes.