Cryptocurrency, despite deep declines in value this year, has reached a point where it is integrated into common financial interactions in Minnesota and across the country. You can buy clothes and food with it in some places, and Kwik Trip and Cub has traditional ATMs and new ones for crypto.

Home Depot, Whole Foods and Starbucks are among the retailers now accepting crypto at checkout, said Vivian Fang, Honeywell professor of accounting at the University of Minnesota’s Carlson School of Management. Payments platform and credit services company PayPal introduced a crypto payment option late last year, and most services that use PayPal now allow shoppers to pay for their items with crypto.

“It opens up options for over 2 million online merchants in the United States,” Fang said.

In the simplest terms, cryptocurrency is unregulated digital money, which is usually named by the company offering it, such as the most popular form called Bitcoin. You purchase a certain amount and your transaction is recorded in a digital ledger, which ultimately is used to ensure that you have enough balance to cover your transaction.

Consumer bitcoin spending is shifting towards high-value purchases in categories such as real estate, investing, travel, digital goods, and gaming sectors, as well as charitable donations, Josh Held said, chief strategy officer at OpenNode, a Los Angeles-based bitcoin payment platform. which helps businesses in over 125 countries add Bitcoin to their payment stack.

“On the business side, we’re seeing demand from many types of businesses and merchants looking for instant, reliable, and lower-cost payments,” Held said via email. “In some cases, these are businesses that need bitcoin, want bitcoin, or are curious about new technology that optimizes the transfer of value. On the payments side, purchases of luxury goods with bitcoin continue to grow as well as any type of purchase allowed through e-commerce solutions like Shopify.”

Financial institutions claim to have seen an increase in investments in digital currency and its use for overseas transactions. There are also a growing number of small businesses funding through crypto.

Immigrants are also increasingly using it to send money to relatives in their home country, according to the Wall Street Journal.

The downside is that cryptocurrency is still unregulated, so it’s a buyer beware system. The consumer should research whether a business is viable and ethically run.

For example, the United States Securities and Exchange Commission (SEC) is investigating Coinbase Global for trading in digital assets that should be registered as securities. The SEC also sued one of the company’s executives and two others for insider trading, Bloomberg reported last week.

Celsius Network, which presented itself as serving the function of a bank without all the hassle, filed for bankruptcy protection.

Crypto’s rapid immersion in mainstream payment systems has led lawmakers to believe it needs to be regulated. The US government and individual state agencies are trying to rein in the fast-growing digital asset segment with regulations and oversight of illegalities.

Under a bill called the Responsible Financial Innovation Act, elected officials are trying to regulate cryptocurrencies in the United States. The bill, introduced in early June and not yet passed by the House or Senate, would introduce digital asset taxation and decentralize autonomous organizations that can execute blockchain-based contracts, among other things.

Minnesota officials have taken a stance on enforcement against crypto-based companies that fail to comply with state law. Earlier this year, the Minnesota Department of Commerce joined 31 states and the SEC in a $100 million settlement with crypto fintech BlockFi over the sale of unregistered securities. As a result of the settlement, the state will receive more than $940,000 which will go to the state’s general fund.

However, raising capital and transferring funds are part of the overall value of crypto. Growing wealth by investing in crypto assets is where most people find it helpful, and financial advisory institutions like Charles Schwab offer investment opportunities in coin trusts, bitcoin futures and stocks for clients interested in crypto for business purposes outside of their traditional portfolio.

More than $2 trillion has been lost as cryptocurrency values ​​plummeted this spring, mostly due to inflation, high interest rates, and the instability of digital coins. And while many companies have since recouped some of that in the markets, some analysts have pointed to volatility as a reason not to engage in digital currency.

But others liken it to the dot-com breakup of the late 1990s, which ultimately strengthened many surviving companies.

“This is the third or fourth cycle of crypto we’ve been through,” said Chris McAlary, founder and CEO of Coin Cloud, which operates ATM-like digital currency machines. “We have already overcome these cycles.”

And against the backdrop of crypto, many financial firms that don’t want to miss out on a potential market are maneuvering to equip themselves to handle digital coins. For example, the Wall Street Journal reported that major credit card companies Visa and MasterCard are preparing to engage with him.

About a year ago, Las Vegas-based Coin Cloud struck a deal with Cub Foods’ parent company, United Natural Foods Inc., to install the machines in 500 of its locations. The partnership could grow to 4,000 locations, making it one of the largest retail relationships for Coin Cloud. Currently, there are 159 Coin Cloud kiosks in Minnesota, including 105 at UNFI-owned grocery stores.

Coin Cloud also has kiosks at Lewis Drug locations in South Dakota and Williston Basin International Airport in North Dakota, McAlary said.

McAlary has intentionally sought out partnerships with physical retailers, as they receive high levels of foot traffic. This is also where customers most often use cash.

“They’re a place of people’s daily routine,” McAlary said.

Earlier this year, La Crosse, Wis.-based gas station and convenience store operator Kwik Trip, which has more than 800 locations in Wisconsin, Minnesota and Iowa, announced a partnership with the operator. Coinsource bitcoin ATMs. Texas-based Coinsource kiosks are found in 2,500 locations in 46 states.

Twin Cities entrepreneur Chad Capp is currently trying to find technology to allow people to pay for gym memberships with crypto, possibly even launching his own brand. Capp is the co-founder and president of HelloGym, an Osseo company that developed software to manage gym operations and now works with over 800 gyms.

“With our gym membership management software, we want to be on the cutting edge of technology, and we felt this was a way to incorporate something a little different,” Capp said, adding that the Branded crypto could then serve as a driving factor for rewards programs.

Small entities have also discovered that digital currencies make it possible to carry out successful crowdfunding campaigns. This trend should increase in the years to come. Kickstarter, the popular New York-based crowdfunding platform, said late last year that it was developing a sister company that will live on blockchain, the encrypted data storage technology used for cryptography.

Providing people with a way to convert money into crypto to make payments or transfer funds to another person has become a lucrative business opportunity. Cash App, the digital money transfer application owned by Block Inc., enabled users to send and receive Bitcoins starting in 2018.

So far, more than 10 million Cash App accounts have purchased Bitcoin, the company recently reported. The company has also added a new direct deposit feature that allows users to automatically convert a percentage of their direct deposit into Bitcoin for free.

Using PayPal or the Cash app still requires most users to attach a bank account. Meanwhile, most crypto exchanges and crypto wallet operators do not require a bank account to use, making it an attractive alternative for millions of people who do not have a bank account and traditional credit, Fang said. According to the Federal Deposit Insurance Corp., an independent agency created by Congress, about 5.4% of American households in 2019, the equivalent of 7.1 million people, did not have a checking or savings account. this year.

As a result, cryptocurrency is increasingly being used among low-income minorities who see barriers with traditional financial products, Fang said. According to the Pew Research Center, Asian, Black, and Hispanic adults are more likely than white adults to say they have ever invested, traded, or used cryptocurrency.

Accessibility, not affordability, is the main barrier preventing most people from using crypto, Fang said.

“There is no barrier when it comes to crypto,” Fang said. “You don’t need a decent credit score.”