Not so long removed from a time when cryptocurrency seemed like a fad and many were skeptical of its utility, CFOs have quickly warmed up to the idea of investing in it or using it for payments.
“Warm” may be an understatement. According to a recent Deloitte survey of 200 North American finance chiefs at companies with at least $1 billion in annual revenue, only 1% said they did not expect to use cryptocurrency for business purposes over the long term.
Many companies are looking more at the short-term or mid-term. Almost a quarter (23%) of the CFOs said in the June survey that their treasury functions will use crypto for investments or payments within the next two years.
As Deloitte’s study report noted, this year may be a tipping point for corporate adoption of cryptocurrency. Recent developments include a President Trump executive order in March creating a strategic bitcoin reserve and a U.S. digital assets stockpile. Also, the U.S. Senate in June passed legislation governing stablecoins, which are usually backed by reserve assets and tied to a traditional currency like the U.S. dollar.
“CFOs are thinking beyond any ‘crypto hype’ and focusing on the practical implications of digital assets,” said Steve Gallucci, U.S. and global leader of Deloitte’s CFO Program, in a press release. “They appear to be assessing where cryptocurrency can drive efficiency, reduce friction in global operations and future-proof financial infrastructure.”
Still, CFOs are hardly carefree about cryptocurrencies. Asked to select up to three of their biggest concerns about investing in them, 43% of those polled cited price volatility in non-stable cryptocurrencies such as bitcoin and ether. Deloitte said the sentiment was hardly surprising, considering past price fluctuations.
Close behind on the list of concerns were complexities around accounting and controls and a lack of industry regulation. Both the U.S. Securities and Exchange Commission and the Financial Accounting Standards Board have taken steps recently toward heightened scrutiny of cryptocurrencies.
At the same time, though, CFOs cited several potential benefits of accepting cryptocurrency as a method of payment. Again, asked to select up to three responses, they put enhanced protection of customer privacy at the top of the list with 45%, followed by improved facilitation of cross-border transactions.
“Transactions conducted in crypto do not require intermediaries like banks, thus reducing costs and speeding up settlement,” Deloitte noted. “What’s more, stablecoins tied to the U.S. dollar in some cases serve as a hedge against changes in foreign exchange rates.”
Longer term, CFOs said there are business cases for non-stablecoin crypto that go beyond investments and payments. With survey participants asked to select all responses that applied, 52% cited supply chain tracking, followed by cross-border transactions (47%), hedging (44%), capital raising (42%) and payroll (29%)
