Why A Corporate Crypto Account Makes Increasing Sense

It’s been a strangely turbulent year for crypto investors and the onset of the bear market for alt coins has been more savage than anyone predicted. But recent turmoil hides a rather different long-term pattern for the more established and low-risk parts of the crypto universe. The big picture pattern over the last three years is characterized by the increasingly complete inclusion of crypto into the regular financial system, with the safeguards, regulation, and supporting systems expected by businesses operating under the scrutiny of public markets. We can expect that process to further accelerate because of recent scandals. In the meantime, corporate crypto accounts have been the fastest growing types of account as more and more companies in every kind of sector from retail to services, trading, and manufacturing find that there are many good use cases for accepting or even preferring crypto payments. Despite the recent market turbulence in the more speculative parts of the crypto universe, the rate of corporate adoption has been little affected. International transaction speeds, almost instant transaction verification, avoidance of currency risks, and lower banking costs have started to make certain types of crypto a regular part of the modern CFO's arsenal of tools as they look for the best available technology and lower costs.?

While recent headlines have focused on bad actors and some dramatic fall-out from speculation and cyclical downswing, the underlying trend has not been so easily disrupted. The simple fact is that the use cases for crypto assets have continually increased, and this realisation means that investment into fintech built on blockchain technology also continues to attract a large proportion of venture capital. In particular, the utility of well-backed stable coins (such as USDT - Tether), has been widely recognized as a safe store of value, as well as a low-cost way to enable rapid cross-border transactions without relying on local intermediary banks and systems that are as slow to clear as SWIFT.?

Personal finance is one thing, but corporate finance and standards of regulation are always rather different. Therefore, finance managers and CFOs reading this newsletter may well be wondering just how easy or hard it is these days to open a corporate crypto account and then integrate such transactions into their regular accounts? Our answers are ‘much easier’ and ‘more straightforward than you’d expect’. Let’s start with the first question. Based on our own experience and those of our clients, we can say that the process is now very similar to opening a corporate account for the first time at any traditional bank and all the reputable Exchanges are careful to ensure that they comply to KYC and the AML regulations of their local markets, as well as commonly accepted international standards. Whereas a personal account can be opened in a matter of minutes, the extra documentary validation means that the corporate process can take 2 to 5 working days before an application is completed, accepted and the account is ready to be used. The good news is that while the account opening is not especially fast, it is as robust a procedure as you would expect from any international bank. And because the Exchanges are digital native companies, you will find their apps are more user-friendly. The second question - how to ‘book’ transactions on company balance sheets - relates to what is commonly seen as an obstacle to transacting in crypto. Here, the simple fact is that a proof of transaction or receipt is available for everything a company would do. When the transaction in question is for a stablecoin, such as USDT, whose value is 1:1 correlated to the dollar, the process is no different to booking a purchase or sale of regular foreign currency. In a world where public listed companies in multiple heavily regulated jurisdictions are able to list crypto assets on their balance sheets and accept payments directly in a variety of coin types, facilitating and registering a pegged currency transaction is not going to be an accounting or audit challenge for any size or type of company. So, while press headlines may focus on the speculative edges of the world of crypto, at the other extreme a quiet revolution has seen stable coins become established as a secure transaction currency for all kinds of companies.?

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