Crypto business wallet

The phenomenal growth of cryptocurrencies since the launch of bitcoin in 2009 has made it essential that businesses must keep up with developments. Today, any businessman making decisions, budgets and plans should incorporate crypto management or risk losing a foothold in the competitive market.

 

You can always rely on GBO International Financial Services LTD for full crypto advice and guidance to get relevant services. We have many years of experience along with highly trained professional representatives that can advise on Crypto licenses, business bank accounts, and all the other aspects of handling crypto currencies in the business world. Feel free to contact us to schedule a consultation regarding your corporate crypto needs.

 

In this article, we are focusing on the full spectrum of digital blockchain cryptocurrencies such as Bitcoin and Etherium as well as the central bank digital currencies (CBDCs) or stablecoins.

Find out how we can help you open a Crypto Business Bank Account

    Where does crypto fit in your business model?

    Two fundamental aspects of crypto currencies should be separately incorporated into your decisions:

    • Cryptocurrency as an investment
    • Cryptocurrency as a payment mechanism in transactions.

    Cryptocurrency as an investment

    Over the past ten years, the major world economies went through a remarkable period of meager bank interest rates, low inflation and strong growth. During this period, investors could easily decide to choose any one of the alternative investment havens. In the post-pandemic world, most economies are entering a period of sustained inflation, and central banks are battling to restrict consumer price rises without impacting taxation and growth. Suddenly, holding money in cash or long-term bonds threatens to produce negative yields because inflation rates are running way ahead of interest rates. The stock market has fallen so fast in 2022 that it’s close to the classic definition of a bear market (S&P 500 down 16% by mid-May, Nasdaq Composite down 25%.)

     

    Until this, cryptocurrencies were not seriously considered a haven for company money as an investment, because they cannot contend with traditional havens on any of the three criteria. The extreme volatility of Bitcoin (which is still the benchmark of crypto) gave the whole market an image of instability that made it entirely off the radar. Recently, this picture has changed. MicroStrategy, the industry leader for embedded analytics software tools, announced that it had purchased more than a billion dollars of Bitcoin tokens in 2020. Elon Musk, the world’s richest man, invested over $1.5 billion.

    For companies looking to invest their funds, high inflation rates are making cryptocurrencies increasingly attractive.

    Using crypto as a currency for payment

    Companies need to incorporate a digital medium of exchange for accepting payment for goods and services from customers and paying suppliers.

     

    A significant advantage is that accepting digital currency for payments can lower transaction fees compared to conventional banking channels. Accepting payments via credit card involves payment processing companies that charge fees for every card swipe plus a percentage of the transaction total. Taking crypto payments can reduce these costs to less than 1% of the transaction amount.

     

    Currently, nearly one-third of all small businesses in the US now accept digital payment of some kind. There are other benefits besides lower costs. Companies are protected from fraudulent chargebacks when they accept digital payments because blockchain transactions are irreversible. Allowing for receipts in crypto currency increases the range of potential customers to include international buyers who don’t have credit cards or dollars.

    Storing your business’ cryptocurrency

    The digital keys that give access to and control digital currencies are usually stored in a wallet of some kind. A cryptocurrency wallet can be a physical device, a software program or an external custodial service which holds the keys needed for cryptocurrency transactions. Most crypto exchanges offer a wallet on their own website, but that may not have the level of security that a corporate crypto holder requires. In that case, one of the other options should be considered.

    If you have any questions, the expert team at GBO are ready to provide advice and guidance, answering all your needs.

    A business crypto wallet – the technology needed to work with crypto currencies

    To accept and use any digital currency in a transaction, a company needs to set up a digital wallet (sometimes known as a crypto wallet) on a recognized digital currency exchange or with a crypto-friendly bank.

     

    Depending on the purpose of the company’s use of crypto currencies, the choice should be between hot wallets, which are used as operational accounts handling large volumes of transactions between the company and its customers and suppliers, or cold wallets that are mainly used to store the digital tokens of investments.

     

    The primary purpose of the crypto wallet is to track movements by keeping a record of the type and quantity, value, date and time of acquisition and all other details relevant to the transaction. Unless your company is prepared to invest up-front in developing your own systems to integrate digital currencies into your company’s accounting, you should consider using a third-party platform to provide wallet management services that will track and manage your crypto assets.

     

    We at GBO have a team of highly experienced advisors who can point you in the right direction and help you make the right decisions when setting up the proper crypto wallet for the company.

    Finding the best crypto wallet for your business

    Your company may need multiple types of crypto wallets, so here are a few things to consider:

    • Will your company be using crypto only for transactional movements (customer receipts and supplier payments), or are you also investing company funds in crypto assets?
    • What level of security do you need – to have control over your private keys or to use a trusted custodial service?
    • How many people must have access to private keys?
    • How much control do you have over employee actions, especially in rogue or terminated employees?

    Will you use crypto for payroll transactions?

     

    Choosing non-custodial crypto wallets

    Hot wallets must be online with a connection to the internet to operate, on a laptop, desktop, mobile device or tablet. They are the most flexible kind of crypto wallet to install – simply by downloading the wallet software and installing it on the device. However, constant connection leaves them vulnerable to hacking.

     

    For companies, one way to address this vulnerability is to opt for ‘multisig’ wallets, which require a specified number of people to sign off on each transaction as it is finalized.
    Cold wallets (hardware wallets, USB drives and paper wallets)do not have any connection to the internet. They only get connected to the internet when physically plugged into an online computer making it impossible to hack them. They can be used for storage of crypto funds that are not being transferred frequently – such as investments.

     

    Suppose you opt for a custodial solution, by choosing a well-respected and reputable custodian. In that case, your cryptocurrencies are more secure because the custodian becomes the guardian of your company’s crypto assets.

    FAQ

     

    Can a business have a crypto wallet?

    Businesses that can trade in and invest in cryptocurrencies should decide whether a crypto wallet is necessary or whether a custodial solution is necessary. Technically, you don’t have to keep your coins in cold storage or download a hot wallet program.

     

    How do businesses hold crypto?

    A business manager should decide on the best method for handling cryptocurrencies based on their primary purpose in the company’s operations. Security is probably the main consideration, followed by flexibility and ease of use. Charges for crypto banking and storage should not be the main criterion. The three main options are:

    • Hot wallets – suitable for companies that will need to handle high volumes of crypto transactions
    • Cold wallets – for storage of longer-term and more stable investments in digital currencies
    • Custodial accounts – if the level of security is a prime concern.

     

    Which is the best wallet to store crypto?

    Choosing the right wallet is very much a matter of crypto and digital currencies’ purpose in your business operations. After considering the options we have described in all the preceding sections, talk to us here at GBO to get the latest and most relevant advice that will suit your own company’s needs.

     

    Why should a company invest in crypto currency?

    Any investment decision needs to balance three main considerations: security, rate of return, and liquidity. A professional investment manager will have to take into account when committing his assets that:

    • Cash and short-term bank deposits have good liquidity, total security, and negative rate of return in periods of inflation
    • Government bonds have good security, low liquidity and yields lagging behind
    • Listed equities have low protection (as seen when markets go into widespread fall), limited liquidity and low or zero rates of return.

    In comparing traditional investments like these with cryptocurrencies, a manager must also consider the taxation levels on investment yields and other external factors. Crypto currencies do not pay dividends or interest, and trading in cryptocurrencies takes place outside of conventional banking channels.

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