Leading European luxury fashion brand Balenciaga has announced that it will start accepting payments in cryptocurrencies like Bitcoin and Ethereum from the beginning of June.

The French luxury fashion house joins fellow fashion brand Gucci in embracing digital currencies as a payment method at select stores. The brand has said it will accept Bitcoin (BTC) and Ethereum (ETH) as a payment method within the United States. For all flagship stores located within the US Balenciaga will endorse crypto payments. The customers based in the US who buys products through its website can also pay in crypto assets. In the future, Balenciaga plans to expand this payment option to other regions and e-commerce platforms. Using cryptocurrencies as a means of payment, Balenciaga becomes the latest legacy fashion brand to do so. Initially Balenciaga will  permit payment only in Bitcoin or Ethereum the two largest cryptocurrencies by market cap. There are further plans to integrate other tokens in the future.

Although the company didn’t provide reason why it will accept Bitcoin as a payment method. A sharp decline in the value of the luxury brand over the past week might have triggered concern, prompting the company to change its business model. Demand from customers could also lead for this move. The integration will take place, according to the company. The payment method to be used is yet need to be finalised.

Balenciaga declared about the formation of an in-house metaverse business unit in month of December. Regarding the unit’s plans or long-term strategy, While Cédric Charbit, the label’s CEO, refused to disclose anything to the WSJ. He did say that he sees “the metaverse as a country,” a market just as important as any nation the brand currently operates in.

According to reports, the "digital fashion industry" will reach $2 trillion by 2022.

Other brands accepting crypto payments :

Currently, only two countries El Salvador and the Central African Republic are accepting Bitcoin as legal tender. Off-white announced that its flagship stores in London, Milan, and Paris would accept crypto payments in March. As part of their metaverse offerings, Nike, Dolce & Gabbana, and Burberry launch non-fungible token NFT collections and metaverse to customers seeking an immersive experience. Starbucks, Microsoft, and AT&T have introduced crypto payment methods to appeal to savvy customers. The U.S. began allowing citizens to pay for everyday bills in cryptocurrencies in April, including mortgages, bills, and even taxes. Venezuelans were able to pay for Pizza Hut with Bitcoin, and other brands like Gap, GameStop, and JCPenney let customers use crypto to buy goods. Recently Tag Huer and LVMH Hoet are other brands that have endorsed crypto payments including Bitcoin, Dogecoin, and Ethereum.

Gucci has already opened payments in Litecoin, Dogecoin, Shiba Inu, and Bitcoin Cash besides the two largest cryptos, Bitcoin and Ethereum. Recently luxury brand Gucci unveiled a Web3 team and purchased a piece of digital real estate on The Sandbox metaverse. Gucci is become the first luxury brand to endorse NFTs and its released first NFT on 25th June and they sold it around $25k. The Gucci has also launched another two NFT collections.

Indrani Bose

CBW - External Analyst

INDIA