Citibank, the consumer division of banking giant Citigroup, has released a report that offers a guide to organizations seeking to introduce cryptocurrencies on their balance sheets or considering accepting payments.
Cryptocurrencies redefine the entire payment infrastructure, according to a new report from Citibank. It adds that digital assets have expanded from “obscure internet news” to a market of two trillion dollars.
What can organizations do to accept cryptocurrencies according Citibank?
The report offers a plan for organizations considering accepting cryptocurrency payments or simply investing in such assets as a store of value, and outlines three key aspects to consider:
- The accounting team should have the right tools to manage cryptocurrencies
- Selection of digital assets to be accepted as payment
- And whether or not the organization will keep cryptocurrencies on its balance sheet
“Cryptocurrencies evolved from obscure Internet news to the market with a capitalization of two trillion dollars. Whether or not cryptocurrencies disrupt the payment system as we know it, they have sparked innovative ideas in payment infrastructure, payment processing, and accounting, in addition to increasingly asserting themselves as a store of value,” the Citi report said.
Citi also offers two approaches to accepting crypto payments. One is through an agent model, which means working with a third party to collect and store their digital assets. The second way is the Direct model, in which organizations hold and control their private keys using their own wallets.
Nevertheless, one of the biggest problems for institutions is price volatility management.
“When accepting cryptocurrencies, the organization will probably want to fix the price according to its functional currency. As a result, the price will adjust in cryptocurrencies rather than fiat currencies. This provides the organization with a tool to manage price risk and the actual price risk will be on the client’s or customer’s side of the organization. “
This is the latest report from Citibank analysts. In March, the division released a 100-page report, in which the team noted that BTC could become the “currency of choice for international trade” because the crypto market saw huge interest from financial institutions.
Citigroup, the parent company of Citibank, is also awaiting regulatory approvals for BTC futures trading. An anonymous source said the multinational giant hopes to get regulatory approval to trade BTC futures on the Chicago Mercantile Exchange (CME).