Explain Why Some Organizations Accept And Others Reject ✓ Solved

Explain why some organizations accept and others reject the use of Bitcoins as a standard form of currency. Identify two major companies that have adopted Bitcoin technology and one that has refused accepting Bitcoin as currency. Discuss each organization, how they adopted (or why they won't adopt) Bitcoin, and recommendations for them to continue to support Bitcoin (or why they should support Bitcoin). The paper should be approximately four to six pages, not including cover and reference pages, and follow APA7 guidelines. Include an introduction, a body, and a conclusion. Support your answers with readings from the course and at least two scholarly journal articles in addition to your textbook. The UC Library is a great place to find resources. The writing should be clear, concise, and well-written; your grammar and style will affect your grade.

Explain why some organizations accept and others reject the use of Bitcoins as a standard form of currency. Identify two major companies that have adopted Bitcoin technology and one that has refused accepting Bitcoin as currency. Discuss each organization, how they adopted (or why they won't adopt) Bitcoin, and recommendations for them to continue to support Bitcoin (or why they should support Bitcoin). The paper should be approximately four to six pages, not including cover and reference pages, and follow APA7 guidelines. Include an introduction, a body, and a conclusion. Support your answers with readings from the course and at least two scholarly journal articles in addition to your textbook. The UC Library is a great place to find resources. The writing should be clear, concise, and well-written; your grammar and style will affect your grade.

Paper For Above Instructions

Introduction

Bitcoin and related blockchain technologies have sparked a debate about whether digital currencies can function as stable money in modern economies. Early enthusiasm highlighted speed, lower cross-border costs, and disintermediation of traditional payment rails; skeptics emphasized price volatility, regulatory uncertainty, and energy concerns. Foundational theorists and practitioners have long debated whether Bitcoin is a viable store of value, a unit of account, or merely a speculative asset. This paper analyzes why some organizations embrace Bitcoin while others refrain, identifies two prominent adopters, and examines at least one notable refuser. It integrates insights from canonical economic analyses and contemporary industry reports to explain adoption dynamics and to offer practical recommendations for future strategy. Key questions include: what motivates adoption, what risks deter uptake, and how organizations can align Bitcoin-related actions with broader strategic objectives.

Case 1: Overstock.com – Adoption of Bitcoin as a Payment Method

Overstock.com announced it would accept Bitcoin as a payment method in 2014, signaling a move from experimental blockchain use to consumer-facing currency acceptance. The rationale cited by Overstock emphasized first-mover branding, inclusion of Bitcoin-using customers in e-commerce, and the opportunity to position the retailer at the forefront of financial innovation (Overstock, 2014). This adoption aligns with the idea that early integration of crypto-enabled payments can attract a niche customer segment, diversify payment rails, and reduce cross-border settlement friction for a portion of sales (Nakamoto, 2008; Yermack, 2013).

In practice, Overstock’s approach involved partnering with third-party processors and wallet solutions to enable checkout in Bitcoin, while balancing settlement in fiat currencies to manage volatility risk. The strategy leveraged the transactional benefits of faster settlement and potential cost savings on certain cross-border operations, while acknowledging the challenges of price swings and customer protection considerations. From a governance perspective, Overstock’s adoption illustrates a commitment to experimentation within established compliance and risk-management frameworks (Böhme et al., 2015).

Why adopt in this case? The company sought to differentiate its brand, test consumer demand, and gain experience with crypto-forward payment rails. The learning outcomes include understanding merchant acceptance, risk controls, and the interaction between consumer behavior and price volatility (Narayanan et al., 2016; IMF, 2015). As a result, Overstock’s experience provides a practical blueprint for other retailers considering crypto-enabled checkout options.

Recommendation: Maintain diversified payment options including cryptocurrencies while implementing robust risk controls, real-time price hedging, clear disclosures about volatility, and consumer protections. Consider continued research into whether broader acceptance or integration with loyalty programs increases net revenue and customer lifetime value. Monitoring regulatory developments, especially around anti-money-laundering (AML) and know-your-customer (KYC) requirements, remains essential (Böhme et al., 2015; IMF, 2015).

Case 2: PayPal – Institutional Adoption of Cryptocurrency Capabilities

PayPal’s foray into cryptocurrency began with enabling customers to buy, hold, and sell digital assets within the PayPal ecosystem (PayPal, 2020). This move represented a strategic shift from simple payment rail experimentation to a broader platform-level integration of crypto assets, including the underlying blockchain-enabled infrastructure that supports custody and secure transaction processing. PayPal’s adoption aligns with a growing trend among fintech platforms to offer crypto services to a broad consumer base, leveraging scale, security, and customer trust to monetize crypto utility.

In practice, PayPal integrated secure custody, user-friendly interfaces, and compliance-driven features to mitigate operational and regulatory risk. This approach reduces the friction for average consumers to participate in cryptocurrency markets and creates onramps for institutional and retail users alike. From a macroeconomic perspective, PayPal’s strategy signals that large payment ecosystems can absorb crypto exposure while maintaining fiat settlement rails, contributing to wider liquidity and market depth (Narayanan et al., 2016; IMF, 2015).

Why adopt in this case? PayPal benefits from expanded service lines, cross-sell opportunities, and a trusted platform that can educate and protect users navigating a complex asset class. The platform benefits from increased user engagement and potential revenue streams from custody, trading spreads, and integrated financial services (Böhme et al., 2015; Yermack, 2013).

Recommendation: Continue expanding crypto services to include more assets, improve education about volatility and risk, and strengthen compliance and consumer protection. Consider deeper interoperability with merchants, such as direct settlement options and optional crypto-based rewards, while maintaining transparent disclosures of fees and risk profiles (Naranayan et al., 2016; PwC, 2020).

Case 3: Amazon — Refusal to Accept Bitcoin as Currency

Amazon has publicly indicated that it has no plans to accept Bitcoin as a payment method. This stance reflects a strategic choice to defer exposure to cryptocurrency price volatility and regulatory uncertainty, especially for a company with an extensive global customer base and complex risk management requirements (CNBC, 2019). While Amazon has explored blockchain patents and technology investments, direct BTC acceptance has not been pursued, illustrating how even large, tech-forward platforms may conclude that current crypto price dynamics and regulatory landscapes do not align with their core payment strategy.

Why refuse in this case? The decision is consistent with concerns about price volatility, consumer protection, high-volume settlement complexities across multiple jurisdictions, and the need to maintain stable, predictable revenue recognition practices (Yermack, 2013; IMF, 2015). Additionally, the energy consumption concerns and governance questions surrounding Bitcoin networks may influence a risk-averse firm’s decision to delay or avoid integration into core commerce rails (Böhme et al., 2015).

Recommendation: Rather than full acceptance, Amazon could pilot targeted crypto initiatives (e.g., blockchain-based gift cards or partner-funded digital wallets) to explore customer interest without exposing the firm’s primary revenue streams to Bitcoin volatility. If broader crypto acceptance is considered later, a staged approach with risk controls, fiat-hedging strategies, and regulatory alignment would be prudent (Naranayan et al., 2016; PwC, 2020).

Why Adoption Varies Across Organizations

The divergence in adoption patterns stems from organizational risk tolerance, customer base, and regulatory environments. Theoretical and empirical work emphasizes that the value of Bitcoin as money depends on its acceptance, price stability, and governance mechanisms. Early adopters often prioritize strategic signaling and customer experience, while late adopters weigh volatility, regulatory risk, and capital allocation constraints (Nakamoto, 2008; Yermack, 2013; Böhme et al., 2015).

Scholars note that mainstream financial ecosystems may benefit from crypto's innovations but will require robust risk management, institutional-grade custody, and clear regulatory guidance. The literature also highlights that Bitcoin’s economic properties as a currency are contested; many observers view it more as a store of value or a hedge against certain macro risks rather than a stable medium of exchange in the near term (IMF, 2015; Narayanan et al., 2016).

Conclusion

The adoption and rejection of Bitcoin by organizations reflect a balance between strategic opportunity and operational risk. Overstock demonstrates how a retailer can leverage consumer interest in crypto payments while managing volatility and regulatory concerns. PayPal shows how a large payment platform can institutionalize crypto capabilities, expanding user access and revenue opportunities. Conversely, Amazon’s stated reluctance to accept Bitcoin underscores the caution large-scale e-commerce platforms exercise when crypto price movements and regulatory ambiguity threaten stability. Across these cases, the literature emphasizes that Bitcoin is unlikely to supplant fiat currencies in the near term but can influence payment architectures, access to digital assets, and corporate treasury policy under appropriate risk controls and governance frameworks. Ongoing attention to regulation, technology improvements, and market maturation will shape future adoption trajectories (Nakamoto, 2008; Yermack, 2013; Böhme et al., 2015; Narayanan et al., 2016; IMF, 2015; PwC, 2020; Overstock, 2014; PayPal, 2020; MicroStrategy, 2020; CNBC, 2019).

References

  1. Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. Retrieved from https://bitcoin.org/bitcoin.pdf
  2. Yermack, D. (2013). Is Bitcoin a real currency? An economic appraisal. NBER Working Paper No. 19791. https://www.nber.org/papers/w19791
  3. Böhme, R., Christin, N., Edelman, B., Moore, T. (2015). Bitcoin: Economics, technology, and governance. Journal of Economic Perspectives, 29(2), 213–238. https://doi.org/10.1257/jep.29.2.213
  4. Narayanan, A., Bonneau, J., Felten, E., Miller, A., Goldfeder, S. (2016). Bitcoin and Cryptocurrency Technologies: A Comprehensive Introduction. Princeton University Press.
  5. IMF. (2015). Is Bitcoin a currency? IMF Staff Discussion Note. https://www.imf.org/external/pubs/ft/sdn/2015/sdn1503.pdf
  6. PwC & Strategy&, (2020). Global Cryptoasset Benchmarking Study. https://www.pwc.com/cryptoassets
  7. Overstock.com. (2014). Overstock to accept Bitcoin. Retrieved from Overstock press release.
  8. PayPal Holdings, Inc. (2020). PayPal to enable cryptocurrency purchases, holds. https://investor.paypal-corp.com/news-releases/news-release-details/paypal-enable-cryptocurrency-purchases-holds
  9. MicroStrategy Incorporated. (2020). MicroStrategy Announces It Has Purchased USD 250 Million of Bitcoin. https://www.microstrategy.com/content/ir/press-release/2020/microstrategy-announces-it-has-purchased-usd-250-million-of-bitcoin
  10. CNBC. (2019). Amazon says it has no plans to accept Bitcoin as payment. https://www.cnbc.com/2019/01/23/amazon-says-it-has-no-plans-to-accept-bitcoin-as-payment.html

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