5 reasons why your company should start using cryptocurrencies
Digital assets such as bitcoin are used more and more in day-to-day business transactions with different purposes: from host of investment to operational purposes. As with any other digital innovation, there might be risks but also strong incentives.
In this article, we look at some of the distinct advantages and challenges cryptocurrencies can offer over more traditional forms of payment:
1. Easier to manage transactions
Crypto enables simple, real-time, and secure money transfers. Credit card payments can take days or even weeks to come through. Meanwhile, cryptocurrency offers instant transfers.
2. Lower fees
Transaction fees are lower with crypto currencies than with credit cards or other payment systems like for example Paypal which can get as high as 4%, and when cryptocurrency is not exchanged to Fiat it also eliminates the need for bank charges.
3. International trade more accessible
Crypto removes barriers and restrictions to trade, ultimately making it easier to accept payments in different currencies.
4. Helps attract new customers
Crypto may provide access to new demographic groups or to clients that value transparency in their transactions as well as those who do not have access to traditional financial services such as banks or credit cards.
5. Positioning the company
By being an early adopter of cryptocurrency, you can gain a competitive advantage over your competition.
Other pros of cryptocurrencies:
- Cryptocurrencies may be a hedge against inflation
Fiat currency loses value over time as more is printed. Bitcoin, for example, has a cap of 21 million, which means it has a limited capacity. This limitation may make the value of Bitcoin is a hedge against monetary inflation.
- Cryptocurrencies is also an investment
A small business can accept crypto as payment and convert it the same day to fiat currency, but it isn’t required to do so. Crypto currencies can be held indefinitely, and if the value increases this could result in capital gains once they are sold.
Challenges that businesses face:
1. Market volatility
Value can swing resulting in huge differences on the real cost in shorts periods of time.
2. Wallet addresses are unrecoverable
The nature of blockchain offers security and bypass middleman, therefore you and you only are the responsible of keeping your funds secure, the is no “Forgot my password” button.
3. Lack of regulation
Every country and region is trying to figure out on how to approach cryptocurrencies and is taking their own path causing the overall regulatory status to be confusing and uncertain.
4. Legal & Tax Compliance
There are dozens of important points to take into consideration when using these payment methods and usually because of its complexity requires a higher level of understanding therefore the assistance of professional legal and tax professionals.
In general, cryptocurrencies have revolutionized the world of finance and that includes large, medium and small companies. When used correctly and, above all, with the right advice, the use of digital assets can mean a great financial and operational advantage for the company.
