Pay enough attention to the cryptocurrency space and one is apt to find much attention devoted to corporate adoption of digital assets.
That can take various forms, including an increasing number of companies considering or committing to bitcoin and ethereum as a corporate treasury asset or simply embracing bitcoin and some of the other major cryptocurrencies and stablecoins as forms of payment. Point is no matter how it’s sliced and diced, more companies are finding utility in crypto, confirming the trend has momentum. Data affirm as much, too.
Consider the findings in the second-quarter edition of Deloitte’s CFO Signals survey. The consulting firm polled 200 North American chief financial officers (CFOs) at companies with at least $1 billion in sales and a mere 1% said they don’t see their employers using crypto in some form over the long-term. Additionally, there’s momentum for cryptocurrency as a treasury holding.
“And 23% said their treasury departments will utilize crypto for either investments or payments within the next two years. That percentage is closer to 40% for CFOs at organizations with US$10 billion in revenues and up,” according to Deloitte.
Corporate Crypto Concerns Linger, Too
Many retail crypto investors have cavalier attitudes and penchants for speculation. They willing venture away from the largest, more stable assets in the space in search of quick home runs. CFOs don’t have that luxury. In fact, their crypto interest comes with plenty of related concerns.
“When asked about their biggest worries related to investing in cryptocurrency, 43% of CFOs cited price volatility,” adds Deloitte. “That’s not particularly surprising, given that the value of non-stable cryptocurrencies such as bitcoin has seen considerable price fluctuations in the past. Earlier this year, for instance, the value of bitcoin dropped 28% in a 10-week span.”
Not far behind volatility on the list of crypto concerns are worries about accounting treatment and crypto industry regulation. Thirty-six percent of CFOs told Deloitte they fret about crypto security protocols and nearly the same percentage wonder if they’re knowledgeable enough to tinker with digital currencies.
Crypto bulls and those viewing the asset class through a long-term lens can take heart in knowing that plenty of CFOs are willing to work through those concerns.
“Fifteen percent of surveyed CFOs believe their treasury departments will likely purchase non-stable cryptocurrencies as part of their investment strategies over the next 24 months,” observes Deloitte. “Respondents at organizations with revenues of US$10 billion and up were even more likely to tick the box. Nearly 1 in 4 (24%) said their finance departments will likely invest in non-stable cryptocurrencies over the next two years.”
Expect More Adoption
One of the big reasons corporate adoption of bitcoin is increasing is because of accounting treatment. Previously, companies that held the largest cryptocurrency on their books had to treat those holdings as intangible assets. With ASU 2023-08, the Financial Accounting Standards Board (FASB).
Thanks to that alteration, CFOs have more latitude to bring one of the major cryptocurrencies into the corporate treasury fold, which is to the delight of owners of those assets.
“Bitcoin, ether, and other non-stable cryptocurrencies can provide certain advantages for treasurers. Such currencies can help diversify an organization’s investment portfolio,” concludes Deloitte. “What’s more, despite price fluctuations, non-stable crypto investments offer the possibility of substantial price appreciation—gains that can far outweigh returns on assets like Treasurys.”
