As cryptocurrencies and blockchain technology continue to creep deeper into every corner of the web. Many businesses small and large are starting to open their eyes to the possibilities this technology enables. According to 2020 data from coinmap.org, over 15,000 businesses worldwide currently accept Bitcoin or offer Bitcoin ATMs on-site. Of those 15,000 businesses that accept Bitcoin, over 2,300 of them are located in the United States. California leads the pack in the total number of businesses that accept cryptocurrency. Approximately 440 businesses in the state accept some form of digital currency.
Even more companies across the globe are adding Bitcoin (and other cryptocurrencies) to their balance sheets. Last year, Elon Musk announced via an SEC filing that Tesla had purchased $1.5 billion USD worth of Bitcoin. He also announced that Tesla would soon accept Bitcoin as payment for its electric vehicles. However, it appears he has since reconsidered his position on this, citing energy usage concerns. It is not currently clear whether Tesla will accept Bitcoin or other cryptocurrencies as payment in the future.
Should Your Business Integrate Cryptocurrency?
There are two main approaches when it comes to your business adopting cryptocurrency. Your business can simply hold Bitcoin or other digital assets on its balance sheet. Or your business can choose to accept cryptocurrencies as payments alongside fiat currency. Important things to consider as your business weighs these options are the costs, risks, potential upsides and downsides, and system requirements of holding or accepting cryptocurrencies.
One approach that many businesses are taking is to simply accept digital currencies without holding them on their balance sheet. Considered a more “hands-off” approach to cryptocurrency, this can be the easiest and fastest way for your business to begin utilizing digital assets. Many companies opt to contract a third-party vendor to facilitate cryptocurrency transactions on behalf of their business, which will charge a fee for their service.
The vendor will accept or make payments in crypto and handle conversions into and out of fiat currencies. The vendor will also handle a majority of the technical questions and manage a number of the risk and compliance issues on behalf of the company.
Alternatively, your business may opt to take a more “hands-on” approach to cryptocurrencies. While taking a more hands-on approach can benefit your business in many ways. It does involve a reasonable amount of consideration to ensure everything is done properly. Most companies that are currently engaged “hands-on” still opt to use a third-party custodian for their cryptocurrencies.
What Can Cryptocurrencies Do For Your Business?
There are many good reasons for your business to consider adopting cryptocurrency in one form or another. Some reasons companies are choosing to integrate digital currencies include Access to new consumer demographics. Consumers that opt to use cryptocurrencies for payments at businesses represent a more technology-savvy consumer base.
A recent study showed that up to 40% of customers that choose to pay with digital currencies are new customers. And their average purchase amounts come in at nearly double that of consumers that pay using fiat currencies.
The early introduction of cryptocurrencies to your business can help position your company well for the future. As we continue to trend towards web3 and potentially even central bank digital currencies. Cryptocurrency and blockchain technology can also open the doors to new forms of capital and liquidity. And even new asset classes such as NFTs.
Digitized currencies provide new options not available using physical fiat currencies since they can be programmed to perform specific tasks. For instance, digital currencies can enable real-time, accurate revenue sharing while also providing increased transparency to help in reconciliation and accounting.
As more individuals enter the cryptocurrency space, businesses are finding that an increasing number of vendors and contractors want to transact using cryptocurrencies. This means that if your business isn’t properly positioned to send and receive cryptocurrencies, you could be leaving money on the table or losing out on potentially lucrative partnerships.
Crypto enables new, more efficient methods of traditional treasury activities. These include things such as enabling real-time, secure transfers of funds, increasing control over the enterprise’s capital, and managing the risks and benefits associated with digital investments.
Some digital currencies, such as Bitcoin, can act as an alternative or balancing asset to cash. Cash is often considered a depreciating asset, as it is eaten up over time by inflation. Digital assets like Bitcoin, however, are considered an investable assets and considered by many to be an effective hedge against inflation.
If you’re interested in learning more about how cryptocurrencies can benefit your business, reach out to the experts at https://oneblinktech.com/ to discuss developing a custom-tailored plan for your unique business needs.