Aston Martin Aramco recently entered into an intriguing multi-year partnership with Coinbase, but in a unique move, the team will receive all of its compensation in cryptocurrency. Payments will be made exclusively with USD Coin (USDC), which is a revolutionary change in the way motorsport sponsorships are conducted.
The Coinbase logo will be prominently displayed on Aston Martin's racing car, including the rear wing and halo, as well as on the racing suits of drivers Fernando Alonso and Lance Stroll, solidifying this special partnership. Aston Martin's commercial director, Jefferson Slack, acknowledged the trust placed in Coinbase's expertise as a leader in this field.
“This partnership shows the trust and confidence we place in Coinbase’s expertise as a leader in digital finance," Slack stated. "By transacting this deal fully in USDC, we're signalling our commitment to innovation, building a sustainable, forward-thinking relationship with Coinbase."
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An important aspect of this collaboration is USD Coin (USDC). Its value is usually fixed at a 1:1 ratio to the US dollar, making it a stablecoin. The issuer, Circle, provides the stability required for this kind of financial transaction by backing USDC with government bonds and U.S. dollar reserves. Even if USDC is widely accepted on well-known cryptocurrency platforms, there are still risks associated with it.
Formula 1 using cryptocurrency
In 2023, for example, Circle's reserves were impacted by the failure of Silicon Valley Bank, which caused USDC's value to momentarily decline to $0.87. Circle responds promptly to these instances, but they do draw attention to possible weaknesses. In Formula 1, the use of cryptocurrency is not new; many companies like Crypto.com have been active in the sport since 2021. F1 teams like McLaren and Red Bull Racing are partnered with blockchain platforms such as Kraken and Tezos.
This partnership results in an increasing trend of cryptocurrency adoption in sports. More than 560 million people worldwide now own cryptocurrency, with stablecoins like USDC spurring growth in transactions due to their perceived stability. Cryptocurrency's involvement in sports sponsorships is projected to expand, although it is not without possible hurdles. This might be significantly impacted by stablecoin rivalry, market conditions, and regulatory attention.
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