Cryptocurrency has been a hot topic in financial markets for years, but is it truly a viable payment method for corporate treasury, or is it just hype? While some companies have begun accepting and using crypto for payments, others remain skeptical about its practicality, volatility, and regulatory implications. So, should treasurers take crypto payments seriously, or is it still too risky and impractical?
The Case for Crypto in Treasury
- Instant Cross-Border Transactions
- Traditional cross-border payments can take days and involve multiple intermediaries. Crypto payments, using blockchain technology, can settle instantly with lower transaction costs.
- Access to New Markets and Customers
- Accepting crypto can attract a tech-savvy customer base and provide payment solutions in regions where traditional banking infrastructure is limited.
- Decentralization and Transparency
- Transactions on the blockchain are immutable and transparent, reducing fraud risks and improving reconciliation processes.
- Hedging Against Fiat Inflation
- Some argue that holding a portion of reserves in crypto can hedge against inflation, particularly in countries with unstable currencies.
The Case Against Crypto in Treasury
- Volatility Risks
- Cryptocurrencies are notorious for price swings, making them a risky store of value. A payment received today could be worth significantly less tomorrow.
- Regulatory Uncertainty
- Governments and financial regulators worldwide are still figuring out how to handle crypto transactions, with rules varying significantly across jurisdictions.
- Security and Fraud Risks
- While blockchain transactions are secure, crypto wallets and exchanges have been targets of hacks and fraud. Managing private keys also introduces operational risks.
- Limited Real-World Adoption
- Despite growing interest, the majority of businesses and suppliers still do not accept crypto payments, limiting its practical use for treasury operations.
The Balanced Approach: Testing the Waters
Rather than fully committing to crypto, treasury teams can take a measured approach:
- Pilot Programs: Experiment with accepting crypto in certain regions or from specific customers.
- Stablecoins as a Middle Ground: Consider using stablecoins (crypto pegged to fiat currencies) to reduce volatility concerns.
- On-Demand Conversion: Accept crypto payments but instantly convert them into fiat to mitigate risk.
- Monitor Regulatory Developments: Stay updated on compliance requirements before implementing a large-scale crypto payment strategy.
Let’s Discuss
- Does your treasury team see crypto as a viable payment method, or is it still too risky?
- Have you experimented with crypto transactions, and what was your experience?
- What challenges or benefits do you foresee in integrating crypto into treasury operations?
We’ll be sharing insights from treasury leaders and industry experts—join the conversation and share your perspective!
COMMENTS
Noah Herman, Fortris Chief Revenue Officer, comments:
The question of crypto payments in corporate treasury isn’t about hype – it’s about practical, strategic integration.
While volatility and regulatory challenges are legitimate concerns, they’re manageable through thoughtful strategy, risk management, and proper infrastructure. Solutions like stablecoins and instant conversion into traditional currencies such as USD mitigate the perceived risks and offer clear paths to adoption without unnecessary exposure to volatility.
However, instant conversion means companies miss out on the chance to fully operationalize crypto within their business, whether that be through balance sheet diversification or better cross-border payments. A “hands-on” approach to crypto payments means companies can explore these opportunities to the full but comes with two main challenges: security and interoperability.
Take compatibility with existing TMS and ERP solutions as a case in point. Treasury teams are understandably reluctant to move away from their trusted tech stacks, but blockchain-based currencies aren’t compatible with those. We believe the answer lies in ensuring any new solution works with the existing back-office setup, without the need for manual processes that erode the time and cost savings of crypto payments.
As for real-world adoption, we’ve observed this tends to move in step with regulatory developments and sea-change moments such as the approval of the first Bitcoin exchange-traded funds in the United States. More regulatory clarity and shifts in accounting guidance – such as the FASB’s move to fair-value measurement for assets including Bitcoin – provide an increasingly robust framework for finance teams to work with. These developments make adoption far less daunting.
Ultimately, crypto payments are becoming a treasury reality – not overnight, but steadily, as organizations build comfort through strategic testing and practical use cases. Treasurers who explore proactively today will be well-positioned to capture tomorrow’s opportunities.
Royston Da Costa, Treasury Masterminds board member, comments:
From my experience, the key to integrating digital assets into treasury lies in cautious, measured steps. For example, while organizations like Save the Children have begun accepting crypto donations, they convert these assets into fiat immediately to minimize financial risks. This aligns with the idea of testing the waters, as mentioned in the article.
I’m more optimistic about the potential of digital currencies—including CBDCs—which I believe will eventually become a more regulated, stable, and scalable alternative. These will likely offer the benefits of speed, cost, and transparency, without the extreme volatility that cryptocurrencies currently present.
For treasurers, the focus should be on staying informed and being ready for future developments. Until regulation and infrastructure catch up, we should remain cautious but prepared for what’s to come.
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