Author of the opinion: Przemysław Kral, CEO of zondacrypto
The football transfer market has long been viewed as a world filled with secret behind-the-scenes deals and negotiations. The transfer window brings immense excitement to supporters eager to see how clubs prepare for the upcoming season.
Given the enormous capital demands faced by clubs and the urgent deadlines for completing deals, this process is not always smooth. There is an option to overcome these issues. The answer has emerged in recent years, and the football industry is beginning to embrace it.
Football has become an important partner for the crypto industry, with data from SportQuake showing a rapid growth in sponsorship deals with football clubs, accounting for 43% of all crypto sports sponsorships last year, valued at approximately $213 million.
Clubs have the opportunity to further develop these partnerships by integrating blockchain technology into their financial systems to enhance transparency and democratize access to the transfer market.
This is not a completely foreign concept in football transfers. In 2018, cryptocurrency was first used in a transfer when Harunustaspor purchased Ömer Faruk Kiroğlu, with part of the transfer fee paid in Bitcoin (BTC). Since then, major clubs worldwide, including Madrid International, São Paulo FC, and Górnik Zabrze, have completed multiple transfers.
These transfers were completed with shortened settlement times and bypassed numerous cross-border payments that could hinder transactions. As more efficient and regulated crypto-native payment rails develop, this process has become even simpler.
The advantages are not only applicable to clubs—governing bodies, including UEFA, can also leverage regulated crypto payment rails to automatically issue performance-based rewards when clubs qualify for the Champions League.
Player transfers require significant capital; not only do initial fees and additional terms reach millions, but the settlement and transaction fees of cross-border payments often mean that lower-league clubs struggle to access the global market.
An early example is São Paulo FC wanting to purchase Giuliano Galoppo from Argentine club Banfield. However, the deal was stalled due to turmoil in the Argentine foreign exchange market. This required stablecoins, and São Paulo FC completed the transfer valued at $6 to $8 million USDC using stablecoins.
Although this transfer was later constrained by Argentine export regulations, which offset the advantages gained from using cryptocurrency, this example highlights the potential of blockchain technology to provide fixed and reliable value in turbulent financial markets.
As the football economy continues to expand globally, systematic modernization through a regulated blockchain-driven framework may be key to ensuring that all clubs, regardless of size, market, and location, have equal opportunities to participate in the transfer market.
"Deadline day" refers to the last day of the football transfer window, when clubs frantically try to finalize deals, often hampered by technology and bureaucracy. In 2015, a malfunctioning fax machine hindered former Manchester United goalkeeper David De Gea's transfer to Real Madrid.
Cross-border payments between teams from different countries can take days (sometimes weeks) to settle, creating bottlenecks that may hinder transfers or put clubs at risk of missing critical deadlines. Introducing regulated crypto rails can allow transactions to be completed in minutes, highlighting the potential to alleviate deadline day chaos.
The impact of introducing blockchain technology into the football transfer market goes beyond beating the deadline clock. Smaller clubs in emerging markets can benefit from democratized access to faster, cheaper, and more efficient rails. Concerns about extended settlement times jeopardizing key deals are significantly reduced, enabling teams to effectively participate in the global market and attract key talent.
In addition to democratizing access, cryptocurrencies and blockchain may play a positive role in profit and sustainability rules or financial fair play. These rules aim to balance the competitive environment of the transfer market, but penalties faced by clubs, such as point deductions, can have devastating effects on their seasons and supporters.
Blockchain technology can help enhance transparency, making football transfers fairer and more seamless. By creating a so-called "financial fair play ledger" that puts all transfers and related financial data on-chain, transparency will increase exponentially, allowing clubs to avoid becoming victims of these rules and unnecessary penalties.
However, these cases are just incidental; there are broader areas of opportunity here. Crypto payment rails can address the most significant issues affecting the football transfer market by creating an overarching, regulated on-chain transfer market. This can ensure that clubs comply more effectively with profit and sustainability rules, enable smaller clubs to access a broader transfer market by cutting cross-border exchange rate fees, and overcome deadline day chaos by reducing transfer settlement times.
As more clubs embrace crypto sponsorship, governing bodies have a significant opportunity to formally recognize blockchain technology and go on-chain with them. Blockchain technology and cryptocurrencies truly have the potential to be used as tools for more efficient (and cheaper) cross-border football transfers, positively impacting club finances, revenue sources, and spending activities. Currently, cryptocurrencies are leaving their mark on football and the sports world through sponsorships, but increasingly through lightning-fast transactions.
Author of the opinion: Przemysław Kral, CEO of zondacrypto.
Related: Wall Street veteran Jordi Visser: Traditional finance will increase Bitcoin (BTC) allocation by the end of the year.
This article is for general informational purposes only and does not constitute legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original article: Opinion: Blockchain Technology Will Transform the Fragmented Football Transfer System
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