Ferrari (NYSE: RACE) will not accept crypto payments for its luxury cars in the US. According to its marketing chief, the company will soon extend the scheme to Europe.
Ferrari is one of the biggest brands in the luxury sports car sector. As such, there is always a high demand for its cars, giving the brand a lot of leeway in who gets priority access to its vehicle. Thus, it surprised many when the company announced it would begin accepting crypto payments. Even Musk, a renowned crypto enthusiast, does not accept crypto for Tesla cars.
Why the Change by Ferrari?
According to Enrico Galliera, Ferrari’s chief of sales, the company hoped the decision would connect them to people outside their traditional target market. To avoid the wild price swings of Bitcoin, the company will accept the Circle USDC stablecoin for payments. BitPay, one of the biggest crypto payment services in the world, will absorb the risk of processing transactions.
The result is that Ferrari will not have to hold crypto in their balance sheet, which would expose their shareholders to crypto market risks. For instance, the collapse of FTX last year placed the entire crypto industry at risk of collapse. Galliera noted that this arrangement would ensure both Ferrari and their dealers never have to handle crypto directly.
The Role of BitPay
BitPay will handle transaction procession, as well as due diligence. They will have to ensure that payments are legit. For instance, they will check funds are not from money laundering and tax evasion schemes. Ferrari made its decision after requests from its customers. For now, the company will limit the crypto option to US clients. However, it is working on a European option to launch early next year.
Why Tesla Does Not Offer Crypto Payments
Tesla and crypto payments seem like a natural fit at first glance. In early 2021, the company briefly launched a scheme to sell Tesla cars for Bitcoin. However, they canceled it after just two weeks. According to Elon Musk, the company pulled the offer after an expose revealed the amount of energy consumed by the Bitcoin blockchain. Since then, Musk has only allowed a limited number of items in the Tesla merchandise store to sell for Dogecoin.
Other Changes at Ferrari
Ferrari is renowned for its two-door V12 supercars with a mid-engine setup. However, it recently launched a four-door model called the Purosangue crossover. The move is part of a broad strategy to poach customers from Aston Martin, Lamborghini, Bentley, and other luxury carmakers.
Future Ferrari Crypto Plans
Ferrari has yet to reveal how many cars it plans to sell via crypto. However, the sales chief admitted this was part of an experiment by the company—every brand needs to reinvent itself to remain relevant. With a new generation of buyers with completely different tastes from the previous generation, the move by Ferrari could help it secure its market share in the new generation of the mega-rich.
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