An overview on using cryptocurrencies as a business in the EU, its benefits, and best practices
The global cryptocurrency market is predicted to grow at an annual rate of approximately 13% until 2030. The market value was around $1.49 billion in 2020 and is projected to reach $4.94 billion by 2030. While the cryptocurrency market for individual clients is undoubtedly booming, the pace at which the corporate cryptocurrency market is growing is slower but is still consistent. Companies can use cryptocurrencies in a plethora of ways, the most popular being direct investments, accepting and making payments, to name a few.
In the European Union, cryptocurrencies are classified as qualified financial instruments and are generally not prohibited by EU law. Regulations differ at the member-state level when it comes to specific types of tokens; for example, Poland prohibits public offering of security tokens. The European Banking Authority states that cryptocurrencies can be accepted by individuals as a means of payment and can be transferred, stored, or sold. The same applies to legal entities and businesses. Businesses can hold, buy, or sell cryptocurrencies using corporate cryptocurrency accounts. Member states within the EU differ in crypto-asset regulation. For example, in Poland, cryptocurrency is legal for individuals and businesses for the purpose of purchase and sale. Businesses are obliged to enrol within the register of virtual currency activities kept by the Minister of Public Finance.
With that being said, the possibilities for business use of cryptocurrencies are limitless. Here are some ways your business can benefit from a crypto-focused expansion:
Major companies have already successfully invested their resources in cryptocurrencies – Tesla, MicroStrategy, Coinbase, and Paypal being some of them. Businesses also use the potential of blockchain to raise funds in the form of ICOs. In 2020, more companies began taking interest in digital assets and cryptocurrencies – which are gaining more traction over time, seeing how the companies are straying from the more conventional ways of investing funds. One telling example is MicroStrategy Inc, who announced last December that it had made more than USD 1 billion in total Bitcoin purchases in 2020. The company identifies it as an investment that would provide an opportunity for better returns and preserve the value of its capital over time compared to holding cash.
TokenEX creates a range of opportunities for businesses by providing them with the ability to buy crypto on behalf of a company. Overseas crypto transactions are cost and time effective; a big win-win for businesses. Entities willing to adapt to cryptocurrency can take advantage of a myriad of possibilities, like enabling simple, real-time, and secure money transfers. Since cryptocurrency transactions are public, all parties can view the transaction details and immediately know the status – the blockchain stores all the data reducing transfer risk – the money cannot get lost. Additionally, TokenEX prepares all relevant documentation for clients’ accounting purposes. Most current crypto providers do not assist in these matters. Cryptocurrency related taxation can be complicated, but with TokenEX it is easier for businesses to account for their crypto-related expenditure.