Gucci has recently announced that it would start accepting cryptocurrencies at select stores in the US, and while this might appear to be yet another announcement from a luxury brand, it is a rather significant event in both the luxury and crypto worlds.
Luxury brands and the virtual space
Luxury brands are no strangers to the virtual world and virtual currencies. From owning properties and opening stores in the metaverse to creating NFTs that offer real-life benefits, businesses in the luxury category have been testing blockchain technology for a while now.
But Gucci is the first major luxury brand to take a deep plunge into it, the overall first being Phillip Plein who, in 2021, became the foremost luxury brand to accept the digital tokens as payment.
For this pilot phase, which Gucci has explained is “the next phase of the company’s Web 3.0 journey”, select stores in Miami, Los Angeles, New York, Atlanta and Las Vegas will now accept as payment, ten cryptocurrencies including Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Dogecoin alongside five stable coins pegged to the USD.
Other luxury brands accepting payments in cryptocurrencies
Apart from the two brands mentioned above, Off-White is the only other luxury brand accepting crypto payments at physical locations, and even this is restricted to flagship stores in Paris, London and Milan.
For now, others appear content enough to explore the metaverse and NFTs.
But would they follow suit soon?
It is still early days, and no one can say for sure if this would happen sooner or later.
Luxury brands have every reason to be wary, considering how volatile the crypto market is. Just recently, Bitcoin recorded a nearly 5% dip in 24 hours, falling to $33,000 on May 9 2021. This is not the first time it has dipped sharply or risen rapidly, and every day seems to bring about new challenges for cryptocurrencies in general.
It does not also help that although more people are moving into the space, quite a number see it more as a means of increasing their value in fiat than an actual currency they can use for everyday transactions.
Maybe more luxury brands will test crypto payments in select locations, but this is as uncertain as the future of these virtual currencies themselves.
For now, luxury enthusiasts who hold cryptocurrencies have one more place to spend their money. And they can do so with some form of assurance that even if they were to trade their purchase tomorrow on the secondary market, they would not entirely lose money, whether or not cryptocurrencies are still in use.