Ferrari to accept crypto as payment for its cars in the US

https://www.reuters.com/business/autos-transportation/ferrari-accept-crypto-payment-its-cars-us-2023-10-14/

by iancmceachern • 3 years ago

65 60 3 years ago

I assume that if you pay for your car with bitcoin that has appreciated in value that you still owe capital gains tax as if you had sold it? If so what’s the advantage of paying using bitcoin?

m00dy• 3 years ago

Using Bitcoin has certain advantages such as cutting off the middle man, bypassing non-transparent AML regulations and having almost instant transaction settlement without waiting for days.

ahoka• 3 years ago

Is this satire?

yieldcrv3• 3 years ago

cheaper, faster, secured lending that doesn't affect a credit score. a few minutes versus 7 - 90 business days on the consumer lending side

no arbitrary transaction limit thresholds to worry about for your large purchase

this infrastructure is inherited by all crypto currencies, or they can be easily converted to one that does

the article is about crypto not only bitcoin

but to your scenario, not everyone has a gain to worry about. if you acquired bitcoin right now to pay for something with it, there is also no gain to worry about. youd do that because thats where your liquidity is: already in other cryptos and you just bought bitcoin to pay. and of the people that only have big capital gains, not all of them care either if they wanted to purchase something, they might have to report a gain too. just saves one step of converting to USD first. they might have capital losses elsewhere they neutralize the gain.

but I think you’re missing that USDC is a big component here, they accept USDC, which does not have price fluctuations

so lets go to your discouraged speculator scenario: they can just deposit their bitcoin in a lending protocol and get USDC back within a few minutes. they have no capital gains tax event. and now can pay for their car without even needing an exchange relationship.

and for everyone else, they just already have liquidity in crypto. They already have USDC and aren’t avoiding any new tax event either.

there are also many shortsighted people that simply won’t consider the tax event. nobody’s problem but their own

pavlov• 3 years ago

“no arbitrary transaction limit thresholds to worry about for your large purchase”

This is not a problem for anyone who buys a Ferrari in cash.

Banks and credit card companies love nothing more than letting you buy expensive things once you’ve shown you have the money.

callalex2• 3 years ago

I don’t mean this in a rude way, but do you have Ferrari money? Traditional financial institutions work VERY differently for the kind of people who do compared to the average person.

Veliladon• 3 years ago

Because if you're sanctioned to hell you can use Bitcoin to get around them. BitPay has been the go-to for sanctions busting for years. Even with regulators making BitPay ID mandatory for transactions over $3,000 you can still easily use a straw buyer. Want a Ferrari in Russia? Export it to China via container ship, then have it travel overland via train to Moscow.

SXX3• 3 years ago

Come on. Painting crypto like some way to bypass sanctions is just laughtable when neither EU nor US have a balls to sanction enough people and enforce any of sanctions. No one of substance is on sanction lists yet and those who are don't need to bust anything. They'll just fly to Dubai and buy their Ferrari here. Or just ask one of their countless relatives living in EU or US to do it for them.

The only people with Russian passport who actually use crypto is refugees who have no access to banking system in EU or someone who want to pay for their Netflix or buy some games on Steam.

PS: Only around 1,000 people are under personal sanctions by US when have to be 7000+:

https://acf.international/list-of-war-enablers

And this list not include all their countless families living in US or EU using the money they stolen in Russia and laundered in west.

tylersmith• 3 years ago

If you're just going to use a straw buyer then it doesn't matter which currency is used.

TrapLord_Rhodo4• 3 years ago

If so what’s the advantage of paying using bitcoin?

People who ask this also ask that same question "what’s the advantage of owning bitcoin".

One example that i would like to give is that you can wrap bitcoin, and put it in a lending pool. I can then borrow up to 30-40% of the bitcoin at a very reasonable APR rate. (2-3%) Now this only works if you consider bitcoin an asset. This allows you to use this bitcoin as collateral for buying a car.

People can do the same thing with stocks, real estate, etc. But with bitcoin, i have no middle man and i do not have to be "approved" or take a "Credit hit" if i make to many inquiries.

tromp• 3 years ago

But they don't price their cars in crypto, of course.

"Prices will not change, no fees, no surcharges if you pay through cryptocurrencies," Galliera said.
Bitpay will immediately turn cryptocurrency payments into traditional currency on behalf of Ferrari's dealers, so they are protected from price swings.

brucethemoose22• 3 years ago

Isn't that the same as just turning it into a Bitcoin exchange and giving the cash to Ferrari?

hef19898• 3 years ago

I'd say a move like this would be more of a Lamborghini thing, but hey!

pnpnp• 3 years ago

Yes

It’s similar to how when I travel overseas, I have local currency in my account & that gets converted to local currency through an intermediary as I pay.

The intermediary usually charges a small fee. I only see local currency exit my account, and the seller only sees their local currency enter theirs.

TrapLord_Rhodo4• 3 years ago

except not at all because you wouldn't have to bring all the cash in 10 briefcases.

ccooffee• 3 years ago

When crypto is involved, I think of shady folks.

If you use a crypto exchange to acquire cash and then purchase a Ferrari in cash, you probably will trigger IRS regulations that require the dealer to report a large cash transaction (>$10k)[0]. I cannot find clear documentation from the IRS that states cryptocurrency transactions trigger mandatory reporting, though it is possible that it is reported somewhere.

From my very biased perspective, Ferrari accepting crypto is just advertising to various "bad folks" (drug/gun/human traffickers) that they're not gonna tell the IRS.

[0] https://www.irs.gov/newsroom/cash-payment-report-helps-gover...

MuffinFlavored• 3 years ago

In Italy they use Euros. In America we use USD.

What is the flow of fiat -> BTC? Aren't there multiple?

Isn't it like $1.00 USD can be 1.00 Tether (of which there are 7+ stablecoin alternatives https://www.makeuseof.com/stablecoin-alternatives-to-tether-...) and then 1.00 BTC to Tether basically fluctuates like crazy?

Thinking outloud here: How are you protected from a price swing? Because the car has a value in fiat I guess... and the stablecoin layer in between (because I don't think you can go straight from USD or EUR into BTC... can you?) is irrelevant. OK, makes sense.

outside1234• 3 years ago

Going after that drug dealing / money laundering segment

fbdab103• 3 years ago

That's really the only angle that makes sense to me here. For cars that start at $200k, who else has the available cash and cannot be bothered to use traditional payment mechanisms?

iancmceachern• 3 years ago

The Venn Diagrams of "Want to buy a new Ferrari" and " have a bunch of bitcoin" seem that they would only intersect in a few places.

toenail8• 3 years ago

I have 90+% of my net worth in bitcoin, it would be far easier to buy a ferrari with bitcoin for me. I don't need a car though.

jcranmer• 3 years ago

Don't forget sanctioned individuals. This payment method must be looking appealing for Russian oligarchs right now.

gambiting5• 3 years ago

Any company doing business with known sanctioned individuals directly would be in super hot legal shit, no matter how they choose to pay. If you say that they can just use an intermediary then they can also do the same with cash - really not seeing the point here.

justapassenger• 3 years ago

It doesn’t. It’s being converted to fiat money during transaction, so all the sanctions will still apply to the payment processor.

And even if it didn’t, they’d apply to Ferrari.

As always, crypto is not actually solving problem other than adding extra complexity and making headlines.

toenail8• 3 years ago

Nah, they accept traditional money to get all of that, which is widely more popular with all criminals.

PedroBatista• 3 years ago

It's a smart move since a large chunk of their target audience has all the reasons in the World to only trade either in cash or crypto.

daft_pink2• 3 years ago

How to say Ferrari customers are sketchy without saying Ferrari customers are sketchy.

Ferrari to accept crypto as payment for its cars in the US

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