New sponsor set to pay Aston Martin team only in cryptocurrency!
F1 News
More and more F1 teams are sponsored by partners who are involved in the world of 'crypto'. Recently Aston Martin have teamed up with Coinbase as well. What sets that deal apart from the rest? The Silverstone-based team will only be paid in crpytocurrencies.
Aston Martin allow sponsor F1 team pay in crypto
Fernando Alonso and Lance Stroll's team have signed a multi-year deal with Coinbase, where the company are set to pay in cryptocurrencies only. This is the first time this happens in the competition. The chosen currency was the USDC, that is linked to US dollar. The Coinbase logo will feature on the Aston Martin's halo, rear wing end plate, as well as on the suits of their two drivers.
"This partnership shows the trust and confidence we place in Coinbase’s expertise as a leader in digital finance. By transacting this deal fully in USDC, we're signalling our commitment to innovation, building a sustainable, forward-thinking relationship with Coinbase," Jefferson Slack, the commercial director of the Silverstone-based F1 team, explained.
Gary Sun, Vice President of Marketing at Coinbase, continued: "This is a huge milestone for Coinbase, marking the first time we've invested in a sports partnership entirely in cryptocurrency. It is also our debut in Formula One, and we are excited to embrace an industry that equally values pushing the boundaries with transformative ideas and technology. We look forward to building on this collaboration with Aston Martin Aramco as we strive for greater economic freedom globally."
Aston Martin makes bold move with cryptocurrency payments
While the USDC (USD Coin) is a so-called "stablecoin", is is a bold move by Aston Martin. 1 USDC should always equal 1 dollar theoretically, but there are also exceptions.
Circle, the company behind USDC, claims full coverage by reserves in cash and US government bonds. Independent audit checks regularly take place to see if the reserves are still available. Moreover, USDC is widely accepted on major crypto trading platforms, which helps keep the coin's value stable.
Still, it is possible that a USDC coin would worth less than a doller. In 2023, the cryptocurrency's value briefly dropped to roughly $0.87, after the Silicon Valley Bank went bankrupt. Circle held reserves in that bank, and it was quickly recovered by the company. Another dips can happen if many people sell the cryptocurrency at the same time, or other problems happen with the company's reserve. Generally however, these dips are temporary.
However, it is possible that the value of USDC could fall below $1. In 2023, for example, the crypto currency briefly dropped to a value of around $0.87, $3.3 billion of its reserves tied up with Silicon Valley Bank, which went bankrupt. However, this was quickly recovered by Circle. Another trigger for a temporary dip in value can be when many people sell their USDC at the same time or when unexpected problems arise with reserves. Generally, however, such dips are temporary.
This article was written in collaboration with Kada Sárközi
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