Bitcoin, bras and brooches: Gucci to accept crypto in US stores
Updated
Brooches, bras, and bitcoin will soon go together like a handbag over a woman’s shoulder.
Gucci will accept bitcoin (BTC) and other cryptocurrency as payment in US stores as part of a pilot project, starting later this month, Vogue Business reported this week. That means rivals are likely to respond, say crypto experts.
“Gucci's move shows that crypto adoption among merchants is still making progress, and I'd expect more fashion and clothing retailers to follow in their footsteps,” Alex Benfield, a cryptocurrency analyst with Weiss Ratings in Jupiter, Florida, told Capital.com.
What is your sentiment on BTC/USD?
BTC to USD
Others could follow
Andreas Park, a University of Toronto finance professor who specializes in cryptocurrency, said the pilot project could impact the overall retail sector.
“If they can get it to work and if it allows them to broaden their reach, increase revenues, or improve their image, others will follow,” Park told Capital.com.
Bitcoin (BTC), bitcoin cash (BCH) and the Ethereum-backed ether (ETH) token are among several digital coins that Gucci will accept. Others include wrapped bitcoin (WBTC), Litecoin (LTC), meme coins shiba inu (SHIB) – which is named after the breed of dog owned by Tesla (TSLA) founder Elon Musk – and dogecoin (DOGE) as well as five stablecoins pegged to the US dollar.
“Gucci is always looking to embrace new technologies when they can provide an enhanced experience for our customers,” said Gucci president and CEO Marco Bizzarri in a statement to Vogue Business. “Now that we are able to integrate cryptocurrencies within our payment system, it is a natural evolution for those customers who would like to have this option available to them.”
Women’s brooches, bras, and handbags are just some of the items for which the Italian luxury retailer is famous, while sales of the private company’s lower-profile men’s clothing items also appear to be brisk.
Alex Benfield, Weiss Ratings analyst (Photo courtesy of Alex Benfield)Company serious about Web3
The pilot will begin to roll out at the end of May with Wooster Street in New York, Rodeo Drive in Los Angeles, Miami Design District, Phipps Plaza in Atlanta and the Shops at Crystals in Las Vegas becoming the first stores to honor crypto. Plans calls for the pilot to be extended to all of Gucci’s directly operated North American stores later this summer.
“While Gucci accepting cryptocurrency payments isn't groundbreaking news in terms of crypto adoption, it does show that Gucci is very serious about staying on top of crypto and Web3,” said Benfield, referring to the next iteration of the Internet, which is expected to use blockchain technologies extensively. They have clearly made it their mission to innovate in Web3, whether that be their metaverse land acquisitions, limited Gucci NFT projects, and now accepting, and holding cryptocurrencies.”
In February, Gucci bought land on the Sandbox, revealing that it is building its own virtual world after buying land on the Sandbox. A game and metaverse world operating on the Ethereum blockchain, the Sandbox allows players to buy, develop, and sell virtual real estate.
Andreas Park, University of Toronto finance professor (Photo courtesy of Andreas Park)Broader strategy
Park noted that Gucci has a broader blockchain and Web3 strategy that includes using NFTs as a means of giving customers access to “special perks.”
“Adding crypto payments to service this tech-savvy group is a logical next step,” he said.
“Gucci has shown a very impressive understanding of crypto and Web3 technology, and appears to have one of the more advanced approaches to this space of any company – not just the fashion industry,” said Benfield.
ETH to USD
Terminal connects with smartphone
Vogue Business said crypto payments are usually accepted in physical spaces through a QR code or near field communication (NFC) reader on an existing point of sale (POS) terminal that connects with a customer’s smartphone cryptocurrency app, functioning like mobile credit card payments. The POS terminal system allows retailers to convert crypto to fiat currency, such as US dollars automatically, or keep the payments in the form of digital coins.
“It’ll be interesting if they manage to set it up to pass the crypto Turing test,” said Park. “Will the merchant know whether the customer paid with crypto? if not, then (the payment system) passes the test.”
In late April, Vogue Business noted, Gucci revealed on its Gucci Vault Discord server that owners of two of its NFT projects — SuperGucci and Gucci Grail — would have special access to pre-order a Gucci collection before it is released to the general public. Vogue Business called the offer “a significant move for a luxury brand.”
In February 2021, Gucci announced a partnership with Zepeto, an app and social media platform, to personalize avatars and create virtual worlds. Gitcoin also mints its own cryptocurrency – Guccionecoine USD (GCC-USD), which is available on several crypto exchanges.
Benfield said Gucci's acceptance of crypto payments in physical locations won't necessarily have a direct impact on crypto or blockchain development, but it does demonstrate the need for more merchant adoption and third-party solutions for crypto payments.
“If Gucci can pull this off with little to no overhead costs, then there is nothing stopping other merchants from following suit,” he said.
How will FinCEN react?
But Park said lawmakers could consider putting up some roadblocks.
He wonders whether the Financial Crimes Enforcement Network (FinCEN) will take action in response. FinCEN tracks US transaction data and shares its findings globally in a bid to curb money laundering and promote national security. US federal law requires financial institutions to report currency transactions worth more than $10,000 completed by, or on behalf of one person to FinCEN. Multiple transactions exceeding $10,00 in one day must also be reported to FinCEN.
“I’m curious if FINCEN’s ears will perk up,” said Park. “Shopping at Gucci is expensive and if that much money changes hands, the question arises if Gucci stores would have to follow FINCEN rules,” said Park. “I doubt it because (such a rule) would set a pretty horrible precedent for main street commerce, but I’d be surprised if there aren’t discussions in government about this.”
Gucci’s move comes less than a month after rival Louis Vuitton launched 10 new gaming-related NFTs. Louis Vuitton, a top rival of Gucci, launched the game in August 2021. Also last month, luxury brands Dolce & Gabbana, and others participated in the inaugural metaverse fashion week.
Markets in this article
Related topics
