Mark Tencaten | the Expansion of Cryptocurrency use in Business

An increasing number of businesses worldwide are adopting bitcoin and many other digital assets for various transactional, operational, and investment needs. Like every frontier, there are uncharted hazards as well as compelling benefits. Mark Tencaten has examined some issues, and information businesses should consider when deciding whether and how to utilize digital assets.

Why should anyone use crypto?

An estimate from late 2020 states that more than 2,300 American businesses accept bitcoin, and that number excludes bitcoin ATMs. An increasing number of businesses worldwide are adopting bitcoin and other digital currencies for various transactional, operational, and investment needs.

There are several potential difficulties associated with using cryptocurrencies for business. Like every frontier, there are both powerful temptations and unknowable risks. According to Mark Tencaten, organizations exploring the use of cryptocurrency in their operations should have two main things: a clear knowledge of why they are doing so as well as a list of the numerous questions they need to take into account.

Mark Tencaten aims to give the business a general overview of the kind of queries and considerations companies should make when deciding whether and how to utilize cryptocurrency. Therefore, it's crucial to plan, be ready, and strategically participate in cryptocurrency if any business plans to do so.

What can cryptocurrency do for the business?

Here are some of the reasons given by Mark Tencaten for why some businesses are now embracing crypto to get the firms thinking about it:

Ø  Crypto may make new demographic groups accessible. Users frequently reflect a more modern audience that values openness in their business dealings. According to a survey, up to 40 percent of clients who pay with cryptocurrency are new to the business, and their average transaction amounts are twice as high as those of credit card owners.

Ø  Introducing cryptocurrency today can assist in raising internal knowledge of this new technology in firms. Additionally, it might support the company's positioning in this crucial emerging market for a future when central banks might issue digital currencies.

Ø  Through tokenized traditional assets, crypto may provide access to new asset classes and capital and liquidity pools.

Ø  Cryptocurrency offers several alternatives that are not possible with conventional money. Programmable money, for instance, can enable correct revenue sharing in real-time while boosting transparency to ease back-office reconciliation.

Ø  More businesses are discovering that key clients and suppliers prefer to conduct business using cryptocurrency. As a result, to ensure seamless exchanges with important stakeholders, organizations may need to be set up to accept and distribute cryptocurrency.

Ø  Cryptocurrency offers a fresh way to improve a number of more conventional Treasury activities, like:

·        Facilitating quick, immediate, and secure money transfers.

·        Assist in enhancing control over the company's capital.

·        Managing the potential and dangers of making digital investment decisions.

Ø  Cash, which may lose value due to inflation over time, may not be a good substitute; hence cryptocurrency may be a good balancing asset. Cryptocurrencies can be invested in, and some, like bitcoin, have done extremely well over the previous five years. Unmistakable volatility concerns do exist, and they should be carefully evaluated.

Authorizing Payments

Some businesses only use cryptocurrencies to make payments easier. Simply converting fiat currency in and out of cryptocurrency to receive or send payments without ever touching it is one way to ease payments. In other words, the business is adopting a "hands-off" strategy that prevents the cryptocurrency from being recorded.

The simplest and fastest way to start using digital assets is perhaps to enable crypto payments like bitcoin without adding them to the business' balance sheet. The company function may need the fewest alterations overall and could help with short-term objectives like expanding customers and increasing the amount of each payment made. Businesses that use crypto in this restricted way rely on outside vendors.

The third-party provider, serving as an agency for the business, converts cryptocurrency payments into and out of fiat money. The majority of the technical inquiries are dealt with by third-party vendors, who charge a service fee. The vendor also manages certain risk, compliance, and control concerns on the company's behalf. However, this does not free the business of all liability for concerns relating to risk, compliance, and internal controls. Businesses must still pay close attention to matters like anti-money laundering and KYC requirements.