If you are thinking about using cryptocurrency for your business, which is something that’s becoming more and more common, and which is often a great way to diversify your operations, there are a few things you should know first.
Although cryptocurrency is new and exciting, and it can definitely help to boost your bottom line, it is not without its risks and challenges, so the more you know, the better your chances of implementing it successfully will be. That being the case, read on to find out more about crypto and your company.
Why Bother with Digital Dosh
Put simply, crypto lets money move faster than a rumour about free cake in the break room. International clients can settle invoices in minutes, not days. There are lower card fees, fewer middlemen and a vague aura of cutting edge cool that might jazz up your LinkedIn posts. That said, crypto is not a magic money tree. It is more like a money rollercoaster with no seat belts. Strap in or sit it out.
The Volatility Circus
Crypto pricing makes the stock market look sedate. Last Tuesday one Bitcoin could buy a small hatchback. By Friday it might only afford a decent bicycle. If you price goods directly in crypto you may wake up to find your revenue has evaporated overnight. Sensible firms peg prices to pounds then convert at the moment of sale. You can also use hedging tools but those are not exactly bedtime reading.
Regulation Reality Check
Contrary to popular myth, crypto is not the Wild West. In the UK the Financial Conduct Authority would like a quiet word if you are exchanging or safeguarding tokens for customers. Anti money laundering rules still apply. You will need Know Your Customer checks, suspicious activity reports and a compliance officer who does more than drink coffee. Ignore this and you could receive a letter from the regulator featuring words like penalty and criminal.
Security: Keys Not Coffees
Your private keys are the digital equivalent of the office front door. Lose them and the burglars stroll straight in. Store working funds in a hot wallet that has multiple sign offs. Park long term reserves in a hardware wallet kept somewhere boring like the finance director’s safe. Backups matter. So do password managers. And phishing emails promising secret airdrops should go straight to the bin.
Blockchains Are Public, So Learn to Stalk Your Own Money
Time for the inevitable buzz phrase what is a block explorer? Think of it as the blockchain’s public CCTV. You paste in a transaction ID and it shows where the money came from, where it went and how many miners have confirmed it. Use one to verify payments instead of trusting screenshots sent by buyers with surprisingly blurry phones. It is also great for soothing jittery accountants who still miss the reassuring stamp of a traditional bank statement.
Getting Paid and Staying Paid
Taking crypto can be as simple as pasting a wallet address on an invoice and crossing your fingers. Please do better than that. Choose a payment processor that forces the customer to pay within a time window then settles to pounds if you prefer life without drama. Decide who eats the network fee. Hint: if you push it onto clients, warn them upfront or expect grumpy emails.
Tax, Accounting and Other Fun Topics
HMRC views crypto as property not currency. Every disposal is potentially a taxable event and yes every swap counts as a disposal. Keep detailed records. Spreadsheet fans rejoice. Your accounting platform probably cannot cope out of the box, so bolt on a specialist integration or hire a bookkeeper who has the scars. VAT still works as usual because the underlying service or product has not magically become tax free.
Wallets: Hot, Cold and Luke Warm
A hot wallet is connected to the internet. Handy, but riskier than leaving your phone unlocked on the night bus. A cold wallet lives offline and is therefore safer, provided no one scribbles the recovery phrase on a Post it note labelled “do not lose this”. Some firms also use multisig wallets that require two or more people to approve a transfer. Think nuclear launch keys but with less political fallout.
Integration Headaches and Hangovers
Developers adore talking about APIs while finance wants an export to CSV button. Bridging those worlds can feel like group therapy. Before signing any contract ensure the gateway integrates with your website platform, your ERP system and whatever mystical software the auditors insist on. Test refunds, partial payments and edge cases such as the intern paying your own company by mistake.
Staff and Customer Education
There is no shame in admitting ignorance. Organise a lunch and learn session. Cover the big ideas: wallets, keys, confirmation times, common scams. Remind staff that clicking random Discord links is a career limiting move. For customers produce a clear FAQ that explains how paying in crypto differs from a card transaction. Over communicate and you will save everyone’s blood pressure.
Risk Management: Boring but Necessary
Set a treasury policy before the first satoshi arrives. How much crypto will you hold. When will you convert to pounds. Who is authorised to move funds. Document this in plain English so that future you remembers. Review the policy quarterly because the market evolves faster than office gossip.
Insurance: Because Things Catch Fire
Crime insurance often excludes cyber incidents and many cyber policies sidestep crypto losses. Ask your broker about a specific digital asset add on. Premiums are not cheap but compare them with the cost of explaining to investors that a hacker emptied the treasury at 3am. Double check exactly what counts as an insurable loss. An employee fat finger sending coins to the wrong address might be classed as negligence not theft. Reading policy wording is dull yet cheaper than litigation.
Looking Ahead: From Tokens to Whatever Comes Next
Today the hot topic is stablecoins backed by government bonds. Tomorrow it might be tokenised invoices or loyalty points tied to a blockchain game. So, while you should stay curious, you should also try to avoid FOMO driven decisions. Evaluate each new craze like any other business investment. Does it solve a problem you actually have. Will it save money or open new markets. If the answer is maybe ask again after coffee.
Common Myths Debunked over Tea
Myth one: Crypto is anonymous. Reality: every transaction lives forever on a public ledger.
Myth two: Transactions are free. Reality: network fees can spike like rail fares.
Myth three: Only criminals use crypto. Reality: so do charities, tech firms and that vegan snack brand.
Conclusion: Tread Lightly but Do Tread
Crypto is neither snake oil nor silver bullet for your business. It is a tool. Use it thoughtfully and your business could speed up payments, broaden its customer base and look modern without actually installing a slide in reception. Rush in without homework and you might spend next quarter explaining losses to the board, and you really don’t want that to happen, right? So, it is fair to say that the smart path sits neatly in between. Understand the basics, manage the risks, keep your accountants sweet and your security tighter than the biscuit budget. Then by all means let Jane brag that the company takes payments in internet money while everyone else argues over printers. Wrap the plan in policy, educate staff and remember that technology is only clever when it works for you, and cryptocurrency is no exception to that rule!