A rising number of businesses throughout the world are using a cryptocurrency exchange along with other digital assets for a range of investment, operational, and monetary purposes. On the border, there is danger, but there are also huge benefits. Determine if and how your company should exploit digital assets by investigating the kinds of queries and insights to be explored.
This essay intends to provide you and your company with a high-level overview of the difficulties and insights businesses should consider when considering whether and how to implement cryptocurrency. If your company wants to prosper, it must plan ahead, be prepared, and enter the crypto market with caution. (For more information on the issues to consider when investing in digital currencies and assets, please visit Deloitte’s companion report titled “Corporate Investing in Crypto: Considerations Regarding Allocations to Digital Assets.”)
In what ways might crypto be beneficial?
According to one estimate from late 2020, about 2,300 US businesses accepted bitcoin; this figure does not include bitcoin ATMs. A rising number of companies throughout the world are using bitcoin and other digital assets for a range of investment, operational, and monetary purposes.
There are several possible benefits and hazards connected with employing cryptocurrency in professional settings. When entering an unfamiliar area, there is always the risk of encountering both known and unknown perils, as well as significant benefits. As a result, businesses considering deploying crypto should be prepared with two things: a comprehensive list of the myriad concerns to consider and a clear explanation of why they are doing so.
What advantages can cryptocurrency provide your company?
Cryptocurrency may open up new user bases. In general, users are a more progressive clientele that values honest transactions. According to recent data, customers who pay with cryptocurrencies are more likely to be new customers and spend more overall than those who pay with credit cards.
If crypto is introduced now, it may have a favorable impact on the company-wide understanding of crypto. It might also help the company get a foothold in this exciting new market, which could one day include digital currencies issued by national central banks.
Tokenizing current investments in traditional markets is one way cryptocurrencies such as Bitcoin may open up new sources of funding and liquidity, as well as potentially entire new asset classes.
Cryptocurrency has advantages that traditional monetary systems do not have. For example, programmable money can enable quick and accurate revenue sharing, enhance visibility, and simplify internal reconciliation. Here are a few of the reasons why some organizations are already using cryptocurrencies to start your company thinking in the same direction:
- An increasing number of organizations are discovering that critical consumers and suppliers want to connect with them through cryptocurrencies. As a result, your organization may need to be prepared to accept and payout cryptocurrency in order to ensure smooth interactions with key stakeholders.
- Cryptocurrency provides a novel approach to enhancing some typical Treasury processes, including Making monetary transactions quick, simple, and secure
- Assisting in the tightening of the company’s financial management, profiting from digital investments while avoiding associated risks
- Cryptocurrency might be a valuable supplement to traditional money, which may lose purchasing power due to inflation. It is possible to invest in cryptocurrencies, and some of them, like bitcoin, have performed well as investments during the last five years. Naturally, there are obvious volatility problems that must be properly considered.
How to use cryptocurrency?
When considering the usage of cryptocurrencies in business, the first question to consider is whether the company will store bitcoin on its balance sheet or will instead utilize cryptocurrencies to make payments. Business success is dependent on taking the time to evaluate numerous possibilities and selecting the one that appears to be the best fit for your company’s aims, and considering all of the benefits and drawbacks, costs and risks, and system requirements.
Turning on “Hands-off” payment processing
Some firms just use cryptocurrencies to facilitate payments. One method for receiving or making payments without physically handling cash is to convert bitcoin to fiat currency and back again. To put it another way, the firm is taking a “hands-off” approach to Bitcoin and will not be accounting for it.
Accepting cryptocurrency payments like bitcoin without recording the value on the books is the simplest and least disruptive approach for some firms to begin using digital currencies. It may be the least disruptive to the company’s overall operations, and it may aid in the achievement of short-term objectives such as extending the company’s client base and boosting the average order value. Businesses that employ even this basic encryption technique typically deal with third-party vendors.
While receiving or making payments, the independent contractor works as the company’s agent by exchanging cryptocurrency for fiat cash. It’s conceivable that this is the simplest option. Because the “hands-off” method keeps cryptocurrency off the business balance sheet, it is less likely to disrupt internal processes.
The third-party vendor handles the bulk of technical inquiries as well as a number of risks, compliance, and control problems for a fee. However, this does not absolve the firm of all responsibility for risk, compliance, and internal controls. Businesses must still address anti-money laundering (AML) and know-your-customer (KYC) rules. Because the Office of Foreign Assets Control (OFAC) is in charge of administering and implementing US government economic and trade sanctions, all parties involved must abide by the restrictions it imposes.