Sao Paulo FC pays transfer fee with crypto

The details of the transfer between Sao Paolo of Brazil and Argentinian mid-table club Banfield is further reminder that we're still early. According to the report, the transfer was conducted using $8 million worth of USDC stablecoin and facilitated by a Bitso exchange.

For anyone that doesn't follow football, there's something called the transfer window where teams are allowed to add players to their team. When you decide to buy(sign) a player under contract in another team, you have to pay the said player's team a certain amount to basically buy out the contract and then some for the parent team.

Football transactions are often carried out across countries within a continent and sometimes even beyond. Also, due to the fact that different countries operate their season in different ways, there are usually two transfer windows recognized by Fifa. One window is in Winter and another in Summer.

Transfers are often carried out using the currency accepted by the parent team of the player. So, in this case, the correct payment for the transfer would have to be paid in Argentinan Peso. However, to simplify the transaction, Sao Paolo from Brazil made the payment using USDC stablecoin.

Policies and Government

Despite everything that the market has experienced: rapidly growing into a trillion dollar market and the constant development, it is essential to keep in mind that we're still early. Sometimes, when people make this inference, there's a tendency to think we're solely talking about the market and dollar value.

The underlying technology behind crypto is still some way off mass adoption and despite what "the money" says, in reality, there's still a long way to go.

Blockchain technology has not penetrated the real world as much as it could and the fact that entities performing crypto transactions are still heavily reliant on "trusted" third parties highlights how far we are from mass adoption.

In any case, the use of exchanges to broker deals between institutions will not be going away any time soon because of numerous regulatory requirements. Alas, even using intermediaries doesn't stop institutions from facing regulatory hurdles, as Banfield found out in this saga that was covered by Coindesk;

The use of crypto also creates other difficulties for Banfield. For having traded USDC, the club will be banned for 90 days from accessing the official exchange market to buy players – an import, after all – at the official rate, following a BCRA resolution published last week.

The situation in Argentina is quite similar to what we have in Nigeria where our foreign reserves are low. Many businesses have to circumvent the government's policies by using the parallel market or simply just transacting exclusively with the dollar.

The verdict is still out on Banfield but I doubt it will be a simple slap on the wrist from the government. Heads will roll for using crypto to circumvent government policy.

In any case, this takes nothing away from the fact that crypto and sports are even more intertwined than ever. Whether it is institutional interest or athletes choosing to get paid in Bitcoin, we're slowly moving in the right direction.

Posted Using LeoFinance ^Beta