New report from “Citibank”: Digital currencies will redefine the entire payment system
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Answer New report from “Citibank”: Digital currencies will redefine the entire payment system
According to a new report from Citibank, cryptocurrencies are redefining the entire digital payment infrastructure.
According to the report, digital assets have expanded from being a modern online mechanism to a $2 trillion market.
What can companies do to embrace crypto?
The report provides an outline for companies considering adopting cryptocurrency payments or simply investing in such assets as a store of value, outlining three key aspects that these companies should consider:
- The accounting team must have the right tools to deal with cryptocurrencies.
- Determine which digital assets will be accepted as a method of payment.
- And whether or not the company will hold cryptocurrencies on its balance sheet.
Quoting from the report:Read:Qatar bans cryptocurrency services
Cryptocurrencies have gone from being a mere obscure innovation on the internet to reaching a $2 trillion market cap.
Whether or not cryptocurrency disrupts the payment system as we know it, it has sparked new thinking about payment, processing, and accounting infrastructure, as well as its growing adoption as a store of value.
Challenges of incubating cryptocurrency:
Citi also offers two ways to receive crypto payments.
One is through the proxy model, which means finding a third party to accumulate and hold the cryptocurrency.
The other way is through the direct model, where companies keep their private keys and control them using their own wallets.
However, one of the biggest challenges facing companies that want to deal in crypto is managing price volatility, the report indicated on this by saying:
When accepting cryptocurrency, a company will likely want to convert the digital currency back into fiat currency.
As a result, the price is reflected in the cryptocurrency rather than the fiat currency.
While this provides companies with a tool to manage price risk, the real price risk rests with the cryptocurrency switcher.Read:Project Current: Extra income for listening to your favorite content
This report is the latest from Citibank analysts.
Back in March, Citibank analysts released a 100-page report titled “Bitcoin, at a tipping point”At the time, the report indicated that Bitcoin could become the currency of choice for international trade as the cryptocurrency market witnessed great interest from financial institutions.
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