Why companies should consider using cryptocurrency in business
An increasing number of companies worldwide are using bitcoin and other digital assets for a host of investment, operational, and transactional purposes. As with any frontier, there are unknown dangers, but also strong incentives. Explore the kinds of questions and insights enterprises should consider as they determine whether and how to use digital assets.
Explore the world with involving cryptocurrency in business
Why consider using crypto?
Roughly 2,352 US businesses accept bitcoin, according to one estimate from late 2022, and that doesn’t include bitcoin ATMs. An increasing number of companies worldwide are using bitcoin and other crypto and digital assets for a host of investment, operational, and transactional purposes. Based on a survey polling a sample of 2,000 senior executives at US consumer businesses, merchants are embracing digital currency payments with the hope of gaining a competitive advantage in the market and in the belief that the use of digital currency will continue to expand.
Big brands are accepting customer payments in bitcoin to purchase everything from groceries to airline tickets. Some sports teams and associations are not only accepting cryptocurrency but also exploring the use of non-fungible tokens (NFTs) to create a more immersive fan experience. This is great example how to involve cryptocurrency in business.
More and more retailers are accepting bitcoin to access additional customers who prefer to pay that way. One can even buy real estate using bitcoin. Several companies, in highly publicized moves, have invested millions of dollars in bitcoin. The adoption of crypto and digital assets is becoming even more common across various commercial and investment applications.
The use of crypto for conducting business presents a host of opportunities and challenges. As with any new frontier, there are both strong incentives and unknown dangers. That’s why companies intent on using crypto in their businesses should have two things:
- List of the questions they should consider.
- Clear understanding of why they are undertaking that action
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Cryptocurrency in business – What can crypto do for your company?
To spark your company’s thinking about crypto and see how can cryptocurrency in business help you, here are some of the rationales behind why some companies are currently using crypto:
- Crypto may provide access to new demographic groups. Users often represent a more cutting-edge and tech-savvy clientele with disposable income for luxury goods and services. In fact, one recent survey found that 85% of surveyed merchants see crypto payments as a way to reach new customers, while 77% said they are accepting crypto because of its lower transaction fees.
- Introducing crypto now may help spur internal awareness in your company about this technology. It also may help position the company in this emerging space for a future that could include central bank digital currencies (CBDCs).
- A greater awareness of the crypto industry and blockchain technology can introduce new investment and liquidity options through traditional investments that have been tokenized.
- Crypto furnishes certain options that are simply not available with fiat currency. For example, programmable money can enable real-time and accurate revenue-sharing while enhancing transparency to facilitate back-office reconciliation.
- More companies are finding that important clients and vendors want to engage by using crypto. Consequently, your business may need to be positioned to receive and disburse crypto to ensure smooth exchanges with key stakeholders.
- Crypto provides a new avenue for enhancing a host of more traditional Treasury activities, such as:
- Enabling simple, real-time, and secure money transfers.
- Helping strengthen control over the capital of the enterprise.
- Managing the risks and opportunities of engaging in digital investments.
- Crypto may serve as an effective alternative or balancing asset to cash, which may depreciate over time due to inflation. Crypto is an investable asset, and some have performed exceedingly well over the past seven years. There are, of course, clear volatility risks that need to be thoughtfully considered.
The decision to use crypto for Operations may require a different way of thinking from that behind the use of crypto for investments:
- Investing in crypto is typically a longer-term play; using it in Operations often requires an even more thoughtful process for handling real-time decisions.
- Using crypto in daily operations could help develop new means of innovative commerce. That’s in addition to possibly extending the company’s reach in the marketplace—not only to new customers, but also to new counterparties.