The watch world is pretty conservative, on the whole. It tends not to rush into things. And that’s what has made it so enduring and so predictable. That’s what explains the steady inevitability of the major brands’ rise to dominance. But as an industry, it is plugged into some of the highest-performing financial institutions, and it knows how to fulfil customers’ expectations. So... are there people out there who want to be able to buy watches with Bitcoin?
Behind-the-scenes discussions
The subject is being thoroughly evaluated behind the scenes, by the finance and/or marketing divisions. Because – let there be no mistake – this is about marketing. There is no added value in offering this additional currency alongside the raft of payment options that currently exists. Local currencies – the dollar, the euro and the Swiss franc – are sufficient to cover almost every transaction.
Currently, Hublot and Chronoswiss are some of the very few watch brands to have dipped a toe into cryptocurrency. In 2018, Hublot made it possible to buy the Big Bang Meca-10 P2P, launched to celebrate Bitcoin’s 10th anniversary, in Bitcoin. The Nyon watchmaker was forging a new path – one that in the end no one, not even Hublot itself, was prepared to take. Hence the radio silence on the topic of cryptocurrency since the P2P’s launch.
When interviewed recently by our colleagues at Bilan, CEO Ricardo Guadalupe confirmed he was working on the possibility of accepting Bitcoin payments by 2022. However, he cautioned on the wide range of actors involved, and the need for institutional support before pushing ahead. “The project is still in the study phase,” said Ricardo. “It’s a very complex process. We need financial partners to support our involvement with digital currency. And don’t forget, there are more than 5400 cryptocurrencies listed on coinmarketcap. Which ones do we choose? And finally, cryptocurrency is extremely volatile. The idea would be to convert it into a standard currency immediately after payment was received, because we’re not a financial institution. IT has become a key part of our business. If everything goes according to plan, it will be possible beginning in 2022.”
And therein lies the main difficulty with the exercise, as well as its central paradox. You need traditional financial partners in order to be able to process transactions in Bitcoin, a virtual currency whose sole function is to facilitate online transactions without the involvement of third parties! Bitcoin is not represented by any physical token, and it is not regulated by a central bank. But equally, it can’t be shut down; it relies on a network of computers that work together to maintain the blockchain.
“Too volatile”
None of that is particularly reassuring. The phenomenal explosion in Bitcoin’s value has led to concerns that the bubble could burst at any time. And that’s why most watchmakers remain circumspect. Laurent Michaud of Swiss jewellery retailer Michaud confirmed that, for them, Bitcoin is a “No go. We don’t accept payment in Bitcoin. It’s too volatile.” It’s hard to argue with this position. At the beginning of the year, Tesla loaded up with 1.5 billion dollars of Bitcoin. And then changed its mind. And more recently, announced it would reopen the door, if the currency cleaned up its act, environmentally.
But Chronoswiss has no problem accepting payments in the cryptocurrency. “We introduced it three years ago and it has brought us decent sales volumes and, above all, new clients,” confirmed CEO Oliver Ebstein. “We released around a hundred test pieces, and our intention is to make this permanent. But three years ago, you could open a Bitcoin account in half a day. Today there is a great deal more paperwork and administration. And Bitcoin isn’t getting very good press at the moment. That’s holding back the big groups. But we’re a family company and we can remain very agile and responsive on this issue.”
Few brands have such a clear position on Bitcoin payments. MB&F is “looking into” allowing payments in Bitcoin. On the retailer side, Bucherer was “unable to comment” on the issue. Arije had nothing to add. Laurent Picciotto, CEO and founder of Chronopassion, said he had looked into the possibility but has no plans to take the plunge for the time being. For institutional actors, caution is clearly the order of the day.
From Franck Muller to Bulgari
But we have seen a couple of timid forays into cryptocurrency. Eight months ago, for instance, Frank Muller joined forces with Bitcoin Cash and Regal Assets to launch its first luxury watch, named “Encrypto”, which also acts as a hardware wallet for Bitcoin.
The initiative bears some similarities to a project launched by Bulgari in 2015, the Diagono E Magnesium, which incorporated a digital safe that could store cryptocurrencies and make payments. It was what is commonly known as a “critical success”.
In the end, a watch is an expensive product capable of generating considerable profits, but it seems to lose respect when plugged directly into the financial markets. A watch tells the time, and you can use money to buy one. And for now, that’s all anyone really wants!
