Does It Make Sense To Use Cryptocurrency In Business?

Cryptocurrencies enable instant and global transactions without the involvement of intermediaries or banks. This is especially useful in online trading, where fast and efficient transactions are key. In this article, you will learn about the difference between cryptocurrency and fiat payments. If you regularly make payments and need a reliable Ukrainian tool to track price dynamics for money exchange - Rates are what you need.

The Difference Between Cryptocurrency And Fiat Money

The ordinary money that we are used to, dollars, euros, and yuan, is called "fiat" in the crypto world. Fiat currencies have both advantages, due to which they are still the main means of payment and disadvantages. The latter is the reason why cryptocurrency appeared.

Advantages of traditional currency

1. Stability. The state is the guarantor of the currency;
2. Understandability for society. Payment in cash or by card is accepted everywhere, this is a means of payment that everyone understands. You can easily purchase Allstate insurance or pay your utility bills.
3. The high degree of protection against cyber attacks and fraud. The Central Bank regularly improves the security system, protecting citizens from loss of funds;
4. Ease of use. Fiat money can be quickly withdrawn from the nearest ATM, sent to a friend by phone number through fast payment systems, etc. We try to make these operations as simple as possible for users, many of them are available in just a couple of clicks;
5. Funds are not so easy to lose. If you lose your bank card, you can quickly block it in the application or by phone number so that no one can use your money. The card itself can be quickly restored: in the application, a virtual card is issued instantly, while a physical card will be produced at the bank in a few days.

Disadvantages of traditional currency

1. Dependence on the law and sanctions. The state completely regulates monetary processes, which affects transfers between different countries (some transactions may be prohibited);
2. Lack of anonymity. Since the bank controls fiat transfers, to carry out monetary transactions you need to open a personal account. In this case, the bank may consider you a suspicious person and either cancel a separate transaction or block all funds;
3. High commissions for international transfers;
4. Strong exposure to inflation - unlimited emission inevitably leads to inflation;
5. Possibility of counterfeiting;
6. Slow transactions. Bank transfers, especially between accounts in different countries, can take several days. Cryptocurrency is based on the blockchain. It does not depend on central banks and government regulators - therefore, unlike dollars, euros, and other currencies, it is decentralized and freer.

Advantages of cryptocurrency

1. Possibility of quick transfer to other countries. Transactions in cryptocurrencies are faster than transactions between banking systems of different countries. One transfer can take a maximum of several hours, but not weeks, as is the case with banks. Therefore, the counterparty will have access to its funds without delay;
2. Anonymity. Customers can make transactions without disclosing their personal data;
3. Less exposure to inflation. The very design of cryptocurrencies suggests that their supply is limited, and because of this, they do not depreciate at the same rate as regular money. The total number of bitcoins, for example, does not exceed 21 million, in contrast to traditional currencies with unlimited emissions. And every four years, the mining volume will be halved, which will curb inflation;
4. Low commission. Commission fees do not depend on the volume of cryptocurrency that users transfer within the system. The commission was introduced only to ensure that a certain group of people - miners - process transactions and support the blockchain of the crypto platform;
5. Independence and lack of regulation. Government sanctions do not apply to the crypto market. However, such advantages do not always convince people that Bitcoin or Binance Coin from Binance is better than euros or dollars. After all, it is difficult to use, exists only in the virtual world, and the technology for its creation is not clear to everyone. In addition, cryptocurrency is volatile - its rate fluctuates for reasons that even professional investors cannot always explain.

Should Businesses Use Cryptocurrency?

Businesses can offer people the opportunity to pay for goods and services in cryptocurrencies where it is legal - this can attract additional demand. After all, in this way, the company gets an audience from those who do not, for example, have an account with Bank of America, but have crypto. There are also several scenarios in which it would be profitable for a business to pay for contractors' services in cryptocurrencies (usually coins pegged to fiat currency are chosen for this, for example, USDT, the rate of which is approximately equal to the dollar exchange rate).

1. The company receives revenue in crypto. In this case, it is logical to spend in the currency in which you earn money. The business has performers from countries where cryptocurrencies are popular. These are Asia, Africa, Latin America, and Eastern Europe. In Nigeria and Turkey, for example, in 2023, 47% of people aged 18-64 are cryptocurrency holders, in the UAE - 31%, in Indonesia - 29%, in Poland - 14%.

Cryptocurrency also gives freedom in the talent search. It is quite possible that there are specialists suitable for you on the market who cannot receive salaries in your country's currency. The company does not have the option to pay in dollars or euros. This issue for business is solved by USDT.

2. Many of the company's contractors are digital nomads. They move from one country to another. They are constantly in need of a currency that can be converted into rupee, lari, franc, etc. - USDT is also great for this.

Conclusion

Before using cryptocurrency, you need to have a good understanding of its features, associated risks, fees, and government regulation in the country you are interested in. If you regularly make international payments and are looking for a reliable tool for tracking exchange rates in Ukraine, we recommend paying attention to Rates. The service is available around the clock wherever you are - be it Los Angeles or Luxembourg.