Tesla believes in the future of cryptocurrencies. More than a year after investing in Bitcoin (BTC), the automaker has deemed crypto-currencies an alternative to cash. Despite these encouraging words, the group is reluctant to announce the return of Bitcoin payments. Instead, the company has turned to Dogecoin (DOGE).
Tesla announces belief in the future of cryptocurrencies
Tesla confirms its interest in cryptocurrencies. In its latest report to the Securities and Exchange Commission (SEC), the U.S. federal regulatory and supervisory body for financial markets, the carmaker took a very favorable stance on digital currencies:
“We believe in the long-term potential of digital assets both as an investment and as an alternative to cash.”
For Tesla, cryptocurrencies like Bitcoin (BTC) are not just assets but means of exchange. In other words, the car firm believes that digital currencies are a viable alternative to fiat currencies, such as the dollar or the euro.
Tesla didn’t invest in Bitcoin just to make a profit by speculating on the rising price. Unsurprisingly, the electric car giant reserves the ability to “increase or decrease” its “digital asset holdings at any time based on business needs” and “market conditions.”
Tesla and cryptocurrencies, a complicated relationship
Tesla has never hidden its attraction to cryptocurrencies. However, the budding relationship between Elon Musk’s firm and crypto-assets has been fraught with many twists and turns. In February 2021, Tesla first accepted payments in Bitcoin (BTC) for its customers in the United States. It was possible to buy a car from the brand by paying the bill with bitcoins.
In the aftermath, the electric car giant invested 1.5 billion in the doyenne of digital currencies. According to the latest report filed with the SEC, Tesla held $1.96 billion in Bitcoin as of March 31, 2022. The firm has already made a nice gain on its initial investment.
Under pressure from shareholders, Tesla chose to abandon payments in Bitcoin a few weeks after the announcement. The American group claimed to be concerned about the use of “carbon-rich fuels” by the mining farms.
Subsequently, Elon Musk pledged to reinstate Bitcoin payments as soon as the mining farms convert massively to green and renewable energy. The Tesla CEO required 50% of miners to rely on clean energy before announcing the return of cryptocurrency payments.
To accelerate the industry’s shift to green energy, Tesla has partnered with Jack Dorsey’s startup Block and blockchain app company Blockstream, among others. The three companies have embarked on building a Bitcoin mining farm in Texas. This infrastructure will be powered entirely by solar energy.
Elon Musk balks at reinstating Bitcoin
Despite the efforts made by miners, Elon Musk has yet to announce the return of Bitcoin payments. The billionaire has admitted, however, that the mining industry has already made significant changes to reduce its environmental footprint. Yet a study by the New York Digital Investment Group (NYDIG) reveals that Bitcoin will account for only 0.9% of the world’s carbon emissions in 2030.
In parallel, Tesla has started accepting Dogecoin (DOGE) as a payment method on its official online store. Some of the products offered by the brand can be purchased with the cryptocurrency.
On Twitter, Elon Musk also announced that Tesla will accept Dogecoin at some electric car charging stations, starting with the new Supercharger being built in California. Meanwhile, there is no sign of Bitcoin’s return to Tesla.