Tesla customers can now buy its electric vehicles with bitcoin, its boss, Elon Musk, said on Wednesday (US time), marking a significant step forward for the cryptocurrency’s use in commerce.
“You can now buy a Tesla with bitcoin,” Musk said on Twitter, adding that the option would be available outside the United States later this year.
Elon Musk said bitcoin paid to Tesla would not be converted into traditional currency, but would be retained as bitcoin.Credit:Bloomberg
The electric-car maker said last month it bought $US1.5 billion worth of bitcoin and would soon accept it as a form of payment for cars, in a large stride toward mainstream acceptance that sent bitcoin soaring to a record high of nearly $US62,000.
Bitcoin, the world’s biggest digital currency, rose more than 4 per cent after Musk’s tweet and was last up 3.5 per cent at $US56,178.
Musk said bitcoin paid to Tesla would not be converted into traditional currency, but he gave few other details on how the bitcoin payments would be processed. The company was using “internal & open source software”, he said.
Most mainstream companies such as AT&T and Microsoft Corp that allow customers to pay with bitcoin typically use specialist payment processors that convert the cryptocurrency into, say, dollars and send the sum to the company.
“Tesla and other companies are showing that crypto is here to stay, and its mainstream adoption is only going to increase,” said Simon Peters, analyst at investment platform eToro.
Like other cryptocurrencies, bitcoin is still little used for commerce in major economies, hampered by its volatility and relatively costly and slow processing times.
Musk, who regularly posts comments on Twitter about cryptocurrencies, last month criticised conventional cash, saying when it “has negative real interest, only a fool wouldn’t look elsewhere”.
Customers can now use bitcoin to purchase a Tesla.Credit:Bloomberg
He had said that the difference with cash made it “adventurous enough” for the S&P 500 company to hold the cryptocurrency.
Earlier this week, Fed chief Jerome Powell said that the public needs to understand the risks behind bitcoin and other cryptocurrencies, even as the central bank itself is studying the potential costs and benefits of a digital dollar.
“They’re highly volatile, see Bitcoin, and therefore not really useful as a store of value,” Powell said in remarks to a virtual summit hosted by the Bank for International Settlements. “They’re more of an asset for speculation. So they’re also not particularly in use as a means of payment. … It’s essentially a substitute for gold rather than for the dollar.”
Following Tesla’s investment in bitcoin, companies including Mastercard and Bank of New York Mellon have embraced the emerging asset, sparking predictions that bitcoin and other cryptocurrencies will become a regular part of investment portfolios.
Uber chief executive Dara Khosrowshahi said the ride-hailing company discussed and “quickly dismissed” the idea of investing in bitcoin. However, he said Uber could potentially accept the cryptocurrency as payment.
General Motors said it would evaluate whether bitcoin could be accepted as payment for its vehicles.
Tesla recently added “Technoking of Tesla” to Musk’s list of official titles.
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