Should I accept cryptocurrency like Bitcoin and Ethereum?

Curious about cryptocurrency and how it might impact your business? In this article, we weigh the pros and cons of cryptocurrency for SMEs and assess whether or not UK businesses stand to benefit from this rising trend.

Bitcoin and other cryptocurrencies, such as Litecoin and Ethereum, have gained a solid foothold on a global scale. These digital currencies allow you to transfer funds and control your money without fear of centralised interference from banks.

Bitcoin in particular is already trusted by more than 100,000 businesses around the world, including Amazon (if you use your bitcoins to purchase Amazon gift cards) and Expedia, and it’s backed by large financial brands, such as Visa and NASDAQ.

It’s not just big businesses whose curiosity’s been piqued either; some SMEs are relying on cryptocurrency entirely, in lieu of a centralised banking system. According to a recent survey of 1,000 small- and medium-sized enterprises across all sectors, entitled SME Banking 2020: Changing the Conversation:

“There is a clear appetite among SMEs for value-added services, with more than 60 percent confirming that they would use their bank if these were offered, including Bitcoin and peer-to-peer lending.”

So why is the use of cryptocurrency rising among SMEs? Here are four reasons...

What are the Disadvantages of Cryptocurrency?

Cyrptocoins for SMEs, Towergate

The biggest con of adopting cryptocurrency in your SME is that many people throughout the UK still don’t understand how digital currencies work. This means you’ll need to educate your staff on cryptocurrencies, so that they in turn can help customers.

Furthermore, regulators like the HMRC and IRS are still struggling to classify and adopt digital currencies. While it is not illegal to trade in cryptocurrencies (which are usually classified as commodities), they are not recognised as a government-backed currency which could potentially lead to some legislative grey areas.

Final Thoughts

When you consider that here are 5.4 million private sector businesses in the UK and SMEs make up 99.9% of these, a 60 percent interest rate in cryptocurrency is no small number. In the end, it’s up to you to decide whether or not cryptocurrency is right for your business, but early adopters do have the potential to get a leg up on their competitors by reaching more customers and reducing their transaction fees. Try these links for more info on cyber crime and SME insurance.