Brief History of the Use of Cryptocurrencies in Football
The use of cryptocurrencies in the acquisitions and transfers of football players has been growing since its first use.
In 2018, the Bitcoin cryptocurrency was used for the first time by a football club when acquiring a player: Harunustaspor, an amateur club in Turkey, paid the equivalent in Bitcoin of 4,500.00 Turkish liras when signing player Ömer Faruk Kiroğlu, with the main objective of increasing the visibility of this club in Turkey and globally.
In 2021, the transfer of player David Barral to Inter Madrid, a Spanish 2nd division club, was entirely carried out in Bitcoin.
In 2022, the São Paulo club acquired the player Giuliano Galoppo for 6 million dollars paid in the USDC stablecoin. As the Brazilian club did not have dollars to carry out this acquisition, this was the solution presented by Bitso, a cryptocurrency exchange that sponsors this club.
Other Uses of Cryptocurrencies in Football
In addition to player transfers, the use of cryptocurrencies is being explored in other areas of football, namely in the creation of fan tokens by football clubs.
These tokens allow fans to support their favorite teams by purchasing these tokens, being rewarded with club merchandising, game tickets or stadium visits. Holders of these tokens can also make decisions about the club, such as choosing the equipment used or the team’s entrance music at the stadium.
The Socios.com platform has already launched fan tokens for more than 50 football teams. In 2021, Lionel Messi’s transfer to Paris Saint Germain included a payment in $PSG tokens from this platform. Player Cristiano Ronaldo also received $JUV tokens from Juventus on this same year to celebrate the milestone of 761 goals in his career.
There is also a growing interest in cryptocurrency brokers in sponsoring football clubs. In 2024, Kraken, a cryptocurrency exchange, became one of the official sponsors of Tottenham clubs Hotspur and Atlético de Madrid.
And not only in football are cryptocurrencies being used. In 2020, NFL player Russell Okung received half of his $13 million contract in Bitcoin.
Advantages of Using Cryptocurrencies
Football player transfers involve large amounts of money, which have been moved through the traditional banking system.
However, these methods can be slow, involve high commissions and are sometimes not transparent. International transactions, in particular, may experience significant delays due to the need for currency conversions and other regulatory and banking requirements.
Commissions associated with cryptocurrency transfers can be lower than those in traditional banking systems and also have the advantage of the fact that these digital assets do not follow any transaction schedule, meaning payments can be made at any time. This facilitates international transactions, eliminating the need for currency conversions.
Cryptocurrency transactions are recorded on a blockchain, reducing the risk of fraud and increasing confidence in negotiations for all parties involved.
Challenges in Using Cryptocurrencies
Although interest in the use of cryptocurrencies in football is growing, their acceptance is far from universal. Not all clubs, agents and players are willing or able to transact in digital currencies.
Furthermore, the regulatory and tax framework for cryptocurrencies is not yet fully defined in several jurisdictions, meaning their use may be considered too risky, mainly due to accounting and reporting obligations that have to be fulfilled by football clubs in their countries of origin.
Cryptocurrencies are also quite volatile, so their value can fluctuate significantly in a short period of time. The use of stablecoins, cryptocurrencies linked to another asset, such as the dollar, can mitigate this risk.
Conclusion
Cryptocurrencies may have the potential to transform football player transfers in the future, offering a more efficient alternative to traditional transfer methods. However, volatility, lack of regulation and lack of knowledge of its advantages and disadvantages and how to carry out these transactions can be significant obstacles that prevent its large-scale use.
The use of cryptocurrencies, in their various forms, by players and clubs in the main global football leagues seems to be able to positively influence other clubs and players to be more receptive to exploring ways of using cryptocurrencies in football. Therefore, the next few years will be crucial in determining the long-term impact of cryptocurrencies on football and other sports.
by Inês Bragança Gaspar, Practice Area – Sports, Fashion and Entertainment
