Cryptocurrency as an industry has had quite the trajectory. When these assets first hit the market over a decade ago, few could have predicted that they would evolve into a global phenomenon, as well as a trillion-dollar industry. But this is exactly what has happened, with every sector from finance to even travel feeling the impact in some way. While we’re used to hearing about crypto in the context of multinationals like JP Morgan or BlackRock, what does crypto mean for your local business? So far, it has become clear that crypto impacts them in the following ways:
Fundraising Opportunities
Businesses are always looking for ways to raise funds and cryptocurrencies offer this in abundance. One crypto-powered fundraising option is tokenization. This refers to selling small portions of ownership in a project through a crypto token. These tokens are usually either launched directly or presale is held prior to their listing on crypto exchanges. This is often a good option because many investors look towards cryptos as a means of investment. As Michael Graw writes, many investors are on the lookout for the best crypto to invest in and if a business already has a reputation or looks promising, they might buy into their tokens.This represents a massive opportunity for local businesses as they can bypass bank loans, using personal savings, and other traditional fundraising means. Also, because of the collective investment via the token, many investors will take it upon themselves to promote the business.
New Ventures
Cryptocurrency can also represent a new business angle for local enterprises. There is little shortage of ways to make money from crypto and some of these are already aligned with traditional business operations. For example, local casinos might decide to delve into the world of crypto gambling, which has proven to be quite lucrative. Besides their land-based location, the local business could open up an anonymous casino or one dedicated to a single token. There is also a horde of crypto-related ventures that businesses could explore such as a token exchange, crypto storage solutions, crypto-focused media, etc. Businesses might also decide to begin offering services geared towards the crypto market. An accounting firm could expand its offerings to include the crypto market, marketing firms could target crypto companies, and so on. The crypto world is chock-full of opportunity and local businesses can take advantage of them.
Payment Options
As much as cryptos are an investment vehicle, they are also a currency and come with payment opportunities for local businesses. If they are interested, a local business can begin accepting an array of cryptos for their goods and services. Believe it or not, it is not an overly complicated process as there are services that will help them set up wallets, as well as infrastructure to accept crypto by transfer, card, and so on.The value of cryptos tends to go up and down and accepting them could be a way to increase your profits. A number of multinational companies and even public figures have begun accepting crypto and local businesses do not need to be left out. Using crypto also means that your business can spend it on goods and services from other businesses.
Tax Implications
As much as cryptocurrency represents opportunities for local businesses, there are also certain complexities that have to be considered. One of these is taxation, which has been a hot-button issue for crypto users over the years. Unlike fiat currency, crypto is considered an investment by the government and taxed as such. Depending on the price fluctuations and other factors, the amount of tax a business will pay on its crypto will not be as easy to determine as with fiat.Some local businesses may opt to auto-convert crypto payments to fiat once they receive them but even with this tax expertise is needed. This is especially important because governments all over are taking crypto taxation more seriously and punishing those who don’t fulfill their obligations.
Expanded Customer base
Cryptocurrency is not subject to a lot of the same limitations as fiat currency thanks to its decentralized nature. This means that by offering goods and services for sale in crypto, local businesses can reach a wider customer base.A person who lives in a different country, for example, might run into roadblocks trying to make a payment in USD due to bank restrictions. But because crypto is a decentralized global currency, they will not likely have this problem. This means that local businesses can use crypto to make strides in reaching a global audience.
By Chris Bates
