The proliferation of cryptocurrencies like Bitcoin, Ethereum has been nothing new to people with a significant interest in the digital financial market. As a matter of fact, since Paypal, Xbox, Overstock, and several other big names have accepted this emerging means of payment, more and more businesses have considered adding bitcoin or Ethereum to their companies’ assets. In this case, to know a business account for cryptocurrencies, the possible risks, the advantages of having a business account as a part of your company’s holdings are significant to get the hang of before taking the next step.
What is the importance of creating it, and is it safe?
In this day and age, when we constantly hear of bank frauds, cyber frauds, online phishing,… entrusting the holdings and all the payment transactions to a bank to reserve and arrange doesn’t sound so safe as it used to do. The advent of cryptocurrency seems to have gained more and more trust from investors and enterprise leaders, primarily when all the transactions between two parties are based on intelligent contracts configured by sophisticated blockchain-supported algorithms. This uprising payment method is quite promising regarding the high-security encryption it offers, which only you can get control of.
Besides, other reasons strengthen the idea of applying cryptocurrency in business transactions like catching up with the state-of-the-art digital payment channels or giving your customers another way to transfer their money.
How important is it?
Cryptocurrency is predicted to be prevailing over the world soon:
The giant Microsoft has applied cryptocurrency to their customers purchasing their apps and services since 2014. However, Paypal took action first and forestalled Microsoft 3 months before that. Following the two famous names are other remarkable corporations and firms like Starbucks, Etsy, Wholefood,… Also, the new users of Bitcoin whose attention is captured by Blockchain are increasing considerably day by day. It’s reasonable to say that we can set high expectations of Cryptocurrency’s robust influence expansion. Of course, no company will want to fall behind their competitors in updating the latest high-tech trending solutions for the good of their customers and their operational simplification.
Blockchain sets highly protective algorithms for the contracts by which transactions are arranged, and once having been established, the protocol of those contracts can’t be reversed. Fraudulent chargebacks, in this case, can hardly happen. Hence, it’s safe to say that if you don’t have enough trust in an intermediary between you and the buyers, doing business in cryptocurrency can be a more secure approach.
Contract expedition monitoring
Blockchain works like an automated ledger. It seems to help solve the ambiguity problem of traditional banking management activities concerning where and when the credits in our bank accounts come and go. In a transaction, all parties want to know all phases of the contract and need it to be processed as soon as possible. From this viewpoint, using Bitcoin, Ethereum, Cardano, XRP,…in business deals appears to be quite ideal when suppliers, distributors, purchasers can all keep track of the transaction process. And because the smart contracts are encrypted into an automatically working mechanism, its transferring payment will also happen on the receipt of the commodity automatically once the ledger has recorded the excellent successful delivery to recipients.
Less costly service fees
Carrying on a business involving many sides and many steps is costly, considering only remittances made via credit cards. In general, you often have to pay about two to four percent of the transaction’s worth in total alongside approximately twenty-five percent each time the card is used.
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Accepting a business account can mean gaining more customers abroad, especially when the management of traditional banks on remitting money involves so many sophisticated steps and buyers in some countries can’t afford the pre-existing payment channels due to local regulations and reservations in their banking conditions.
Any internet banking method has its downside, and using cryptocurrency in your business doesn’t mean that you can avoid all risks arising against your transactions. As you get into adopting the Blockchain service, you may face some trivial or particularly significant issues that need your total attention.
First of all, we all know virtual currencies are notably erratic in their value. For example, the value of each Bitcoin has constantly seen significant ups and downs throughout its circulation ever since its first introduction in 2009 with a worth of 0$/coin. In April 2021, it reached its highest value of all time at 63,000$, but the prevalent price of bitcoin now in July 2021 is staying only at 33,600$. So what you need to do is to constantly keep the records of your cryptocurrency value and carry out regular and quick exchanges from your digital currency units into cash and vice versa if anything comes up.
There have been a few initiatives developed by some platforms that help solve the problem. An expert in cryptocurrency like a transactional service platform will assist business transactions in making remittances in Cryptocurrency, taking into account its actual value at the exact time of the transaction.
Despite avoiding traditional banks’ possible fraudulent incidents like embezzlement, money laundering, and credit card number hacking, keeping an account in virtual money is not entirely safe. There is no guarantee that hackers and cybercriminals won’t ever successfully cause data breaches to get information from your digital wallet and steal your money away. Although the use of Bitcoin is getting more and more far-reaching, it is still not recognized officially and is not under the government’s aegis. If the Cryptocurrency accounts are violated, the digital credit losses are not insured by the government and a particular bank.
There are several solutions for this, and a notable one is to resort to a digital asset financial service by a reliable name in Cryptocurrency management. For instance, Bitgo offers the insurance for digital wallet service against their fund of 700 million dollars. As for cybersecurity, Yield app and Optherium are a few names that integrate multi-factor authentication functions into their platform for safer transactional activities.
Who can make this account?
An individual can create an account in Cryptocurrency for selling and buying tokens, and a company also can register for a digital money account for their business. However, an entity operating in the market will have to go through a more complicated procedure to get a business account in Cryptocurrency. Registration documents and certifications on the ownership of the company need to be provided in this case.
Procedure to create the business account
Step 1: Choose a platform that you want to register for a digital wallet.
Step 2: Provide required documents, certifications, and other information like emails, contacts according to the platform policy on regulating business accounts.
Step 3: Set up the verification methods to verify your identity.
Step 4: Make a deposit, pay a fee or not depending on the service provider that you use and start doing your transactions.
Pros and Cons
Below are the upside and downside you should bear in mind before having a business account in digital assets of your own company.
- Shorten the duration of the transaction.
- It is reaching international customers that can be accessible by payment methods in Cryptocurrency.
- Get rid of a third party to control money in transactions.
- Keep track of the whole supply management chain, where the cash flows.
- Intermediary fees are excluded leading to the transactional fee reduction.
- Adopt a payment method that is projected to go mainstream shortly.
- Risks of being hacked by cybercriminals.
- Lack of government regulations and insurance.
The bottom line
Bitcoin and Blockchain are no doubt taking the world commercial market by storm. More and more companies and users have adopted it to catch up with the rapidly raging speed of global financial development. Besides the great perks, Cryptocurrency affirms that there are still risks and dangers around the emerging virtual money currencies, and businesses have to be well-prepared to avoid any losses.