Gazing into the Crypto Ball: Why are Football Clubs Adopting Cryptocurrencies?

By Malcolm Campbell-Verduyn, Lukas Linsi and Yesaya Christianto - 21 September 2021
Gazing into the Crypto Ball: Why are Football Clubs Adopting Cryptocurrencies?

Malcolm Campbell-Verduyn, Lukas Linsi and Yesaya Christianto explore why “crypto-fever” has taken a strong hold of football clubs and what should be done about it.

For over 26 years tyre manufacturing giant Pirelli featured on the jerseys of Inter Milan, the reigning champions of the Italian football league Serie A. No longer. Since the start of the current season the famous black and blue shirts of the Nerazzurri are instead adorned with an advertisement for “$INTER”, the club’s new cryptocurrency or fan token issued by

A few weeks earlier, in August 2020, reports of a similar tune emerged in Lionel Messi’s blockbuster transfer from FC Barcelona to Paris SG. A non-negligible part of Messi’s estimated 30-75 million euro annual salary would be paid not in euros backed by the European Central Bank, but by ‘fan tokens’ issued by the superstar football player’s new club itself.

These two examples illustrate how “crypto-fever” has taken a strong hold of global sports in the past years. Unfolding largely in obscurity, with only little attention by researchers or journalists, these developments raise questions about what attracts football clubs around the world to cryptocurrencies? In what forms are they being implemented? What risks may they entail? What responses should policy makers consider, if any?

The use of cryptocurrencies in football

To put these developments in context we built the first public database of cryptocurrency-related projects among football clubs (link). The first version of the database compiles all news reports linking football to cryptocurrency and blockchain technology published up to September 2020. Our initial search was focused on English-language industry sources, such as CoinTelegraph and CoinDesk. While most of the linkages between football and cryptocurrency were undertaken in Europe (including Turkey), we identified a number of cases in Latin America, Israel and Japan. Subsequently, we expanded the search to also include news written in French, Spanish and Japanese. Future editions will expand the collection further geographically and choronologically.

We categorized the various activities so far identified into four broad sets of activities that each ‘feed into’ one another by acquainting and familiarizing fans, management, players with the technology and its seemingly ever-expanding array of possibilities:

a) sponsorship deals from cryptocurrency firms

We were able to identify twenty-three such cases, dominated by the Israeli-based trading platform eToro which began enabling cryptocurrency trading in 2017 and has used the actor Alec Baldwin to promote this service. Football clubs appear attractive to sponsors because they cater to a similar customer base as many cryptocurrencies, i.e. young males.

b) payments in cryptocurrency

Two cases of salary payments to players; three cases of purchases of clubs in cryptocurrencies, as occurred in 2018 when Italian Serie C football club Rimini FC 1912 became the first team in history to be purchased in cryptocurrency; and acquisitions of clubs by cryptocurrency firms, such as in 2018 when Libereum, a Dutch cryptocurrency company, acquired the Spanish football club Elche CF.

c) ticket and stadium management through blockchain technology

Five cases in which football clubs seek the adoption of bitcoin or their own proprietary cryptocurrency to facilitate fan business in and around the stadium.

d) issuance of blockchain-based digital tokens

Twenty-six cases in which clubs (ranging from Paris St Germain and Real Madrid to the Uruguayan side Atletico Penarol) have issued (or plan to issue) tokens. Closely related, and often overlapping are digital collectibles mainly traded on the platform Sorare of which 128 football clubs are partners.

Fan tokens

Among these categories, the issuance by Juventus of a fantoken in early 2018 catalysed a rapid spread of activities by some of the biggest actors in the global sport, making fan tokens—as they were used in Inter Milan’s new sponsorship deal and this summer’s mega-transfer by Lionel Messi—the most salient of the various crypto-initiatives in football.

These initiatives are mainly located in the ‘Big Five’ European football countries, although Israeli, Japanese and Turkish clubs have also issued such digital tokens. They are typically produced in collaboration with a select set of small ‘blockchain startup firms’. The main such firm is Malta-based Chillz, which was founded in 2018 and whose website claims it works with over 65 teams in 25 countries. This firm provides and supports the blockchain technology underpinning fan tokens. It also has its own token, $CHZ, which is traded on a platform run by a subsidiary called Socios where fantokens launched by Chiliz can only be purchased in $CHZ.

Digital tokens are promoted in many different ways under the banner of ‘inclusion’. This typically means that fans holding such tokens have the ability to influence management decisions through polls run by Socios’ partners. The range of these decisions vary. The choice of the starting line-up of Cypriot club Apollon FC, for example, was granted for a friendly in October 2020. Other decisions include official sponsorships, team bus and logo designs and smaller stakes decisions over match-day activities like the song played when the home club scores a goal. Token ownership also provides access to exclusive rewards and experiences promoting the activities of the clubs.

Policy Implications

Digital token issuance in football appears not just to be an ‘one time trick’ but a  sustained and expanding trend accelerating with the on-going COVID-19 pandemic, which reinforced the pursuit of fan engagement from stadiums to the digital sphere. The phenomenon, which has remained under-researched so far, is not just “innocent fun”. They can be an indication of new strategies by leading clubs in how they engage with fans in one of the world’s largest entertainment industries. And, we suggest, these strategies entail non-negligible risks, which require greater scrutiny by regulatory bodies around the world.

First, digital tokens deserve greater attention because they are important for the lens they provide into the growing ‘gamification’ of the beautiful game. Gamification refers not only to competitive activity occurring on the pitch, but off-pitch in which clubs, players and fans all become increasingly involved in rewards-based production and exchange. As with the rewards for winning on the pitch, off-pitch rewards are both symbolic-conveying desirable social status-as well as monetary-driving profit and wealth accumulation. How digital gamification potentially alters and/or extends fan relations with football clubs and players is being closely watched across the sporting and entertainment industries more generally. Football has been a global leader in the adoption of avantgardist digital technologies that is being followed and imitated across other sports, from professional baseball and basketball to Ultimate Fighting Championships. As strategies for repurposing these digital tokens into digital health passes or “immunity passes” to allow fans to attend matches are also growing in the current context of the on-going COVID-19 pandemic, the importance of studying their benefits- and their risks- has only grown.

Second, football’s engagement with such a fast moving but also ‘high-risk’ technology requires close attention for regulatory reasons. The application of blockchain technologies in other activities has attracted the attention of speculators and illicit actors, which has come under growing international regulatory scrutiny. The potential to facilitate illicit activities like money laundering and tax avoidance through fan tokens, even if unintended, needs to be recognized as a possibility along with regulatory responses seeking to clamp down or control their issuance. There are also fair competition considerations between clubs and players issuing digital tokens. Despite their promise to ‘level the playing field’, digital tokens are more easily issued, promoted and maintained by larger and well-resourced clubs.

Global Policy Responses

There is a need for governors of global sport like the Fédération Internationale de Football Association (FIFA) and its six regional associations to recognize and act on the global nature of risks, and not just the benefits that cryptocurrency-cum-digital-fan-token issuance may entail. These risks include the diversion of fan and player energy into what in many cases amount to novel forms of online gambling, speculation and digital data collection with accompanying surveillance and monitoring. At the same time, such engagements fail to actualize other, alternative forms of club ownership, fan participation and player engagement. Fan associations too, such as Football Supporters Europe, need to create awareness of these hazards.

As a Bloomberg Businessweek report on ‘crypto and sport’ recently noted, “sports fans have long been easy prey for companies pushing risky or addictive behaviour, something the teams do little to discourage”. While club attempts to globalize and digitize in difficult times are understandable, we call for policy responses to ensure that fans and players of sports, including the beautiful game, do not further succumb to the vagarities of hyper-capitalism in the 21st century.



Malcolm Campbell-Verduyn, Lukas Linsi and Yesaya Christianto, University of Groningen, The Netherlands.

Photo by Worldspectrum from Pexels

Disqus comments