Utilizing Crypto Tokens In Various Industries

Table of Contents

Enabling payments: “Hands-on”

On the contrary, other companies currently using crypto in a “hands-on” fashion use a third-party custodian. If a company is ready to go beyond simply enabling crypto payments and intends to broaden crypto adoption within Operations and the Treasury function—in other words, to go the hands-on route—it may potentially find a significant increase in benefits, as well as in the number of technical matters to address.

To ready itself, the corporate treasury might consider several preliminary issues, including the following:

  • What does the company want to achieve by adopting the use of crypto? If the goal is unclear, that can lead to scope creep and difficulty in managing risk.
  • What steps has Treasury taken to acquire the necessary know-how to receive, monitor, and manage crypto payments?
  • Does Treasury think the company should maintain custody of the crypto itself or outsource that to a third party?
  • What measures are in place, or what thought has been given to possibly investing in crypto as a new asset class?
  • What adjustments does Treasury foresee in anticipation of the eventual issuance of digital currencies by central banks?

Treasury will be inextricably involved in these decisions, and the changes they require, since:

  • Traditional treasury groups maintain the financing relationships for the company (e.g., banking groups, investment partners, third-party working capital providers).
  • Treasury determines which types of banking and financial services—now in a potentially broader and bolder digital asset ecosystem—corporations will need.

Here are two paths a company can follow when embarking on a broader hands-on adoption of crypto:

  • Use a third-party vendor or custodian to maintain custody of the crypto on a blockchain and provide wallet management services that facilitate the tracking and valuation of the crypto assets.
  • Integrate crypto into the company’s own systems and manage its own private keys. (Consult your legal counsel to determine whether any license will be required to enable the transmission of crypto.)

Many companies currently using crypto in a hands-on fashion use a third-party custodian. Given that tendency, we will examine this path in greater detail.

The second approach, self-custody, presents more complexity and requires deeper experience. Moreover, if the company follows this route, it will likely have greater accountability for the work supporting its transactions. That said, much, if not most, of what follows could also be applicable to companies that self-custody.

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