A test case for mainstreaming cryptocurrency is coming to a local coffee chain in the nation’s capital, FOX Business has learned.
Compass Coffee, a veteran-owned coffee brand with a dozen stores in the D.C. area, is partnering with the U.S.’s largest crypto exchange, Coinbase, to offer customers the option to pay for their morning brew with USDC, a so-called "stablecoin," a form of cryptocurrency that works like a digital dollar.
On Wednesday, customers who pay with USDC at Compass’s Half Street location will get 90% off their orders as well as a non-fungible token, a type of digital asset which they can use to redeem a free tin of coffee branded with the Coinbase and Compass logos.
The move is an example of how crypto is slowly making its way to Main Street, with small businesses now opening up to the idea of accepting payments in digital assets.
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While larger companies like Starbucks, Subway and AMC Theaters accept payments in cryptocurrency, it has been harder to to find mom-and-pop establishments that offer this option.
Coinbase hopes the partnership will go one step further and bust crypto’s rep among D.C. lawmakers and regulators as merely a speculative investment asset. The exchange wants to spotlight crypto as a means to improve what it calls the U.S.‘s "antiquated" financial system that "shortchanges" Americans, primarily through hidden transaction fees.
One of the biggest selling points for cryptocurrency and the blockchain technology it runs on is its ability to cut out the so-called "middle man," or intermediary organizations like credit card companies, that impose fees whenever money is moved across their platforms. Using cryptocurrency helps cut the cost and the time of transactions down to fractions of credit card transactions.
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In the case of Compass Coffee, the company says it currently loses around 3.75% of its revenue to credit card companies through so-called "junk fees," surcharges paid on transactions made with a credit card.
As a small business that survived the COVID-19 pandemic, Compass says every dollar counts and the money it pays credit card companies could be used for staff, rent and suppliers.
"Accepting crypto payments could be transformational for our business," Compass Coffee founder Michael Haft tells FOX Business. "We hope to help transform retail experiences by accepting USDC and limiting junk fees so those margins that would typically go to credit card companies can come back to us and boost the local economy instead."
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While the USDC payment option will only be available at its Half Street store for now, Compass plans to roll out the feature at its eleven other locations in the future.
Coinbase will also host its inaugural Update the System Summit on Wednesday, an event aimed at spotlighting how cryptocurrency can be used to solve real-world problems facing everyday Americans. The event will feature panels with industry players like Marc Andreessen of crypto-focused venture capital firm Andreessen Horowitz as well as lawmakers like Congressman Patrick McHenry and Senator Cynthia Lummis.
"The Update the System Summit will feature the myriad real-life applications that are being developed for crypto and blockchain technology," Coinbase’s Chief Policy Officer Faryard Shirzad tells FOX Business. "Our partnership with Compass is a good pilot to show how stablecoins can simplify finance and save small businesses thousands of dollars on unnecessary credit card fees."
