The Hong Kong restaurant where you can pay in bitcoin and other cryptocurrencies
- Max Levy, chef-owner of Okra Hong Kong, got the idea for letting diners pay in cryptocurrency from the multicurrency bank account he uses to pay suppliers
- His restaurant accepts bitcoin, ether, Ripple, Binance Coin and Binance stablecoin. Diners’ bills are converted using rates updated every hour
A year on, poor business during the coronavirus pandemic and Hong Kong’s exorbitant bank fees have pushed Levy to accept payments from diners at his restaurant in cryptocurrencies.
On Wednesday, Okra Hong Kong started accepting payments made in bitcoin, ether, Ripple, Binance Coin, or the US-dollar-backed Binance stablecoin. He sees the move away from cash as a way to improve the balance sheet.
“The main thing that I saw last year through the pandemic was traditionally most restaurants and most small producers don’t have any savings,” says Levy, who is also the restaurant’s head chef.
What savings they have are stored as cash, which, unlike cryptocurrencies, allows restaurants to easily spend the very low balances they keep, he says.
How does paying in cryptocurrency work? At the end of their meal, a customer chooses the cryptocurrency they wish to pay in, and the bill in Hong Kong dollars is converted into the chosen currency. Rates for the cryptocurrencies against the Hong Kong dollar are automatically updated every hour. The customer scans a QR code the restaurant has generated and confirms the deposit to Okra Hong Kong’s wallet in their electronic wallet or cryptocurrency exchange.
Depending on the cryptocurrency used, the transaction takes from five to 30 seconds.
Levy got the idea of accepting cryptocurrency when he noticed his multicurrency bank accounts – which are used solely to trade with people in other places, such as for buying stock from Japan – were accumulating foreign currencies in small amounts. The money ended up becoming a form of automatic savings.
“If we were keeping just a small amount of our revenue, even if it’s just 1 per cent of our monthly revenue, in some form of crypto, then yes, it’s a risk that the cryptocurrency could go down, but it’s also a possible high reward even if those currencies go up just 3 or 4 per cent,” he says.
The tipping point for Levy to accept cryptocurrencies happened when he lost electronic access to the restaurant’s bank account for 10 days because the battery of the security token device the bank had issued him ran out. The bank did not rectify the problem, instead suggesting he make transactions over the counter. These incur a fee of HK$50 (US$6) each time. Levy makes more than 60 transactions on the Okra Hong Kong account every month.
Trading in cryptocurrencies doesn’t require trust in a bank that can make mistakes, he says.
Levy notes that the values of conventional currencies fluctuate too.
“Here in Hong Kong, I think anyone that’s lived here and has owned and operated a business has definitely had to deal with more than one currency on a regular basis, whether it’s just Hong Kong dollars to US dollars or whether it’s Hong Kong dollars to yuan,” he says. “So, I mean, there’s always a risk involved.”
The fluctuation in value of cryptocurrencies is still a deterrent to business owners accepting them as payment, says Louis Li Sze-chung, a co-founder of CoinUnited.io, a cryptocurrency trading and education platform.
“Upon receiving crypto coins, would a business correctly work out the cost? You might profit from it today, but by tomorrow would it become a loss-making transaction?” he says.
Transaction fees on cryptocurrency exchanges, which increase with traffic on the blockchain network, can run to hundreds of Hong Kong dollars, making them unsuitable for retailers and restaurants that handle multiple small transactions, Li says. Banks are also difficult to circumvent in Hong Kong, he says, as they remain vital to many commercial transactions.
Levy says Hong Kong is very far behind many countries in its use of electronic payments, and he is trying to push it forward.
“Just because businesses aren’t accepting crypto payments doesn’t mean people aren’t willing to use them,” Levy says. Cryptocurrency ATMs and credit cards would make life easier, he says.
Levy doesn’t expect many of his patrons to pay with cryptocurrencies to start with, but believes up to 1,000 people, or 25 per cent of his customers every month, will jump on the cryptocurrency train by the end of the year.