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What could be the future of digital assets in corporate treasury?


Ten plus years after the launch of Bitcoin, cryptocurrencies are no longer considered a pipe dream for some tech nerds with plans of destabilizing the financial establishment. It’s safe to argue that they have gone mainstream given the growing number of investors within the space. Today more retail investors are jumping on platforms, such as PrimeXBT, as they try to understand how to make money with cryptocurrency. Such a platform allows users to speculate on price movements of various assets and profit of their volatility by trading CFDs. Here the trader doesn’t have to own the actual asset to benefit.

Among those trying to get a piece of the crypto pie are corporate treasuries who face an uphill task since their currency infrastructures aren’t suited to manage cryptocurrencies in an integrated and compliant way.

This has led to the birth of companies that can help corporate treasurers and CFOs manage their digital asset workflows along with their fiat operations. One such company is Ledgermatic, whose CEO Luke Sully believes the road ahead will not be smooth sailing. The treasury function will have to endure a significant overhaul as the cryptocurrency technology fundamentally changes the way organizations will manage and move their money.

And Sully isn’t talking about “digitization of fiat but an entirely new financial infrastructure that is being built based on ledgers.”

Sully adds that there have been three waves of digital asset adoption among corporates so far. The first saw a few businesses get experimentally involved with crypto, with early adopters placing Bitcoin on their balance sheets, such as accepting payments in crypto.

Valuable Uses Cases For Crypto Tech

Today the scene has changed as more organizations jump straight to the market as treasurers identify valuable use cases for the tech. Sully adds that “you’re starting to see the green shoots here, as you progress, and digital assets start to integrate into finance, then you start to see companies looking to hedge [foreign exchange (FX)]exposure, or looking to reduce an emerging market currency volatility, by holding digital assets.”

The CEO believes the growing interest and development of central bank digital currencies (CBDCs) has added greater legitimacy to the tech. He sees cross-border payments as one of the biggest areas CBDC will disrupt, even though the full impact of these assets isn’t yet well understood.

As cryptocurrency adoption grows, you find more corporate treasurers struggling to reconcile an ecosystem that is supposed to allow for both crypto and fiat operations to co-exist. It’s a problem that Ledgermatic is hoping to solve since, as things stand, finance leaders lack the tools and infrastructure to manage their finances in a holistic, secure, and compliant manner.

Even though CFOs and treasurers are becoming more comfortable with crypto assets, the evolution is still ongoing. Sully believes a third wave is coming, and it will involve significant changes within the treasury department.

“That’s the third phase we see when you interoperate between digital and traditional assets for liquidity and financing, but also to upgrade and make payment systems much more dynamic rather than static.”

He goes on to add that crypto-assets have the potential to usher a far more flexible paradigm of capital inflows and outflows, “especially when it comes to the legacy 30-day payment schedule in accounts payable (AP) and accounts receivable (AP).”

Tesla invest in Bitcoin

In a recent filing with the Securities and Exchange Commission, Tesla disclosed it had bought $1.5 billion worth of Bitcoin. The company went on to add that it planned to start accepting payments in Bitcoin for its products. The move makes Tesla the first automaker to do so. The company cited a need to maximize returns on cash held as a chief reason for the decision.

And the company isn’t wrong, as Bitcoin has gone ballistic over the past year. The coin has added over 400% on its value and currently trades above $49,900.

It’s not only top companies that are jumping on the crypto bandwagon but institutional investors. Several funds have been accumulating Bitcoin as they anticipate unprecedented price gains. This leaves retail investors wondering where they stand. But there isn’t a reason to worry since there are many ways to profit from cryptocurrencies. You don’t have to purchase the actual asset. You can still speculate on the high market volatility and make nice returns by trading derivatives of various assets like BTC on platforms such as PrimeXBT.

The move by Tesla is expected to inspire other top companies to join the crypto market, which will push the prices even higher and offer the industry even more legitimacy.





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