Banking giant Citi has stated that the emergence and growth of cryptocurrencies has sparked new thinking for the payments infrastructure.
In a recently published report offering a blueprint for organizations considering crypto payments, Citi notes that digital currencies are generally redefining the entire payment ecosystem. The bank further states that cryptocurrencies are also an emerging store of value.
“Cryptocurrencies have evolved from being an obscure internet novelty to reaching a two trillion dollar market cap. Whether or not cryptocurrency disrupts the payment system as we know it, it has sparked new thinking in payment infrastructure, processing, and accounting, in addition to its increasing adoption as a store of value,” Citi said.
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According to the bank, organizations opting for cryptocurrency payments are presented with two options; considering digital currencies as both investments and means of exchange.
In the report, the bank indicated that with the growth of cryptocurrencies, the interest has moved to corporations and other large institutions, and their treasuries have a lot to consider.
How organizations can integrate cryptocurrencies
Citi adds that organizations can use the third-party agent model to integrate cryptocurrency payments. The report notes that utilizing a third-party agent is simple because it eliminates the integration of flows with the company.
Furthermore, the lender recommends that organizations can adopt the direct model of receiving cryptocurrencies. However, Citi warns that this approach needs an extended level of accounting and treasury expertise.
Additionally, the bank outlines a three-point approach for an organization intending to integrate cryptocurrencies. First, Citi states that the organization needs to ensure its accounting team has the correct tools to process crypto, alongside selecting which cryptocurrencies will be accepted as a form of payment.
Lastly, banking entity notes that organizations need to decide whether or not they will be holding cryptocurrencies received as a payment on the balance sheet.
Citi is among the leading financial institutions that have shown increasing interest in cryptocurrencies. In May, the bank indicated that after receiving numerous requests from clients, it was looking into rolling out services to support digital assets.
In late August, the bank also revealed that it was considering offering Bitcoin futures for some institutional clients.
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