In just over ten years cryptocurrencies have evolved rapidly - from its origin, as a niche essentially theoretical concept, to its popularisation and widespread usage on the ‘dark web’, and in recent years establishing itself as a mainstream household currency held by as many as 30% of people in countries like Nigeria, with over 221 million users globally.
In this time the diversity and value of cryptocurrencies, such as BTC, have also exploded, attracting the attention of investors worldwide, with over 5,098 different cryptocurrencies actively traded on established global exchanges like Coinbase in 2020. Most importantly, the actual usefulness and usage of cryptocurrencies on a day to day basis has developed in ways the original creators could only have dreamed of.
Not just for ordinary people - but for businesses as well.
Why businesses are using a crypto bank accounts
The growth and development of cryptocurrencies mean there are many advantages for businesses of all sizes not just to accept crypto payments, but to actively use them for payments as well as hold them as assets in their crypto bank account. In fact the best way to capitalise on the benefits and opportunities of crypto currencies - such as lower transaction fees and easy access to high yield investment assets - is for businesses to have a dedicated crypto bank account.
- 40% of companies in the Americas, Africa, and the Middle East intend to use digital currencies for the operational and transactional purposes within the next year, citing benefits such as faster settlement times and lower transaction costs, particularly for cross-border payments.
- B2B cross-border crypto payments are expected to reach almost 1.8 billion by 2025, compared to 122 million in 2020.
- In the US, B2B crypto payments grew by 40 percent growth between 2014-2020, a trend that is expected to continue, with a CAGR of 21% between 2021 and 2030.
1.Crypto growth and popularity
While much of the media attention has been focused on the growth in value and investment opportunities associated with crypto, the benefits for businesses have received far less coverage. However, this area of cryptocurrencies is perhaps the most exciting and set to be the most dynamic area of development and growth moving forward.
More businesses are accepting crypto payments than ever before.
- The adoption is driven by consumer demand, with over 221 million people now using crypto currencies and over $1 million is spent in Bitcoin on goods and services every day in the U.S.
- There are now 15,174 businesses worldwide that accept Bitcoin, with around 2,300 of those businesses operating in the US.
- There are now 36,656 crypto ATMs worldwide, making it easier to use crypto payments for everyday purchases.
- 80% of retail, grocery, and luxury goods merchants are open to crypto, as well as 25% of travel, hospitality, and automotive merchants.
2. Crypto and employees
As crypto payments become more common, the number of employees interested in being paid directly with crypto has also increased, which has many benefits for both them and their employers.
The future of crypto-salaries
- A recent survey found that over 40% of employees would consider having part or all of their salary paid in crypto.
- The stability of wages paid in crypto is now more possible due to the growth of Stablecoins - which have values linked to traditional currencies like the US Dollar - with total market capitalisation of reaching $187 billion in March 2022, an increase of 15% since the beginning of the year.
The adoption of crypto has been especially rapid in developing markets, such as Nigeria and countries with expensive or unreliable payments infrastructure:
- A report by Statista found that Nigeria has the greatest appetite and adoption of crypto payments per capita, with Chainalysis estimating that African countries collectively received around $105.6 billion worth of cryptocurrency between July 2020 and June 2021.
- Even prior to the recent political restrictions on payments to Russian citizens and companies, almost half of Russians were willing to receive their salary in crypto, with one in 10 expressing they would prefer it to a traditional payment.
3. Crypto and businesses
The rapid development of the blockchain technology that power cryptocurrencies also has many exciting opportunities for businesses, especially those involved in complex, cross border transactions.This is because of the instant, low-cost nature of crypto transactions as well as the potential for highly secure ‘smart contracts’ that help to decrease fraud and legal disputes arising from business contracts.
- The global Smart Contracts market size is projected to reach US$ 1460.3 million by 2028 including large multinational companies like IBM, Oracle and AWS.
- Businesses that switch to blockchain based payments benefit from reduced costs, with estimated total cost savings expected to rise from $301 million in 2021 to $10 billion in 2030.
Crypto payments are the future for businesses
While the media and online buzz around crypto payments has recently focused on skyrocketing price increases and the growth of investment opportunities for individuals, the real benefits for businesses of crypto payments are often overlooked. As crypto payments become more widely accepted and useful on a day to day basis for ordinary consumers more and more employees are interested in being paid in crypto, which can have significant advantages for both them and their employers.
Similarly, for businesses involved in hiring remote workers in other countries, using crypto payments can reduce the tax and administrative burden of paying their wages while also ensuring more of their pay ends up in their pockets rather than in a bank’s annual profit statement. Finally, the potential for smart contracts to revolutionise cross border trade is only now beginning to be realised, meaning there truly has never been a better time for businesses of all sizes to explore how crypto currencies can help fuel their growth in 2022 and beyond.