In A Decade of Digital Transformation in 12 Months, 46 C-suite executives spoke with PYMNTS for its Q2 eBook on what the world will look like as recovery rolls on and the next iteration of normal rolls out. In this excerpt, Eden Doniger, general counselor and chief compliance officer of BitPay, discusses why companies need to adopt a “compliance-first strategy” when implementing a cryptocurrency strategy.
Read the entire eBook here.
When disruptive technology arrives on a scene, it usually plays at the periphery for a while, attracting those with foresight and courage. Most prefer to take a back seat and watch until they feel ready to join the party, if at all. But what happens when that technology rapidly moves to center stage – and your company isn’t ready?
FinTechs, banks, eCommerce providers and other companies all over the world now find themselves at a critical crossroads: Their executives want them to adopt a “cryptocurrency strategy” and launch it yesterday. But only six or 12 months ago, these companies were positioned to comfortably wait; their executives had ignored, rejected or just not understood cryptocurrency.
How does a company adopt a sound, smart cryptocurrency strategy if they don’t have the right leaders and subject matter experts in place? How do they evaluate and select systems and partners that are reliable and compliant? How do they avoid putting their investments, data and reputation at undue risk? Is cryptocurrency inherently just too risky?
As the legal and compliance leader of the world’s leading blockchain payments company, I submit that for a company to jump into the world of cryptocurrency right now, it does not require a dangerous leap of faith. Companies simply need to adopt a “compliance-first strategy.” This means that their cryptocurrency strategy will not be about a quick, superficial win, nor will it be limited by a fear of the unknown. Rather, companies will leverage this innovative and exciting technology in a meaningful and safe manner.
If they have not done so already, companies must put legal/ compliance leaders at the helm right along with other executives, and must prioritize a culture of compliance. Companies must choose providers that are focused on financial regulatory compliance (such as anti-money laundering, anti-terrorism financing, sanctions, know your customer, transaction monitoring, etc.), data security and privacy, customer support, valuable feature sets and longevity. These providers must be steered by executives who understand the nuances of the complex regulatory landscape and care deeply about internal controls, risk mitigation and regulatory relations. Such providers will not be subject to the whims of cryptocurrency price spikes, shifting political pressures or trendy technology features.
Engaging the right kind of legal executive to help design the company’s cryptocurrency strategy – as well as the right kinds of providers to fulfill this strategy – requires knowledge of the evolving cryptocurrency regulatory landscape and compliance requirements. The good news is that, along with the massive digital transformation of 2020 and the adoption of blockchain technology, we are seeing law firms and consulting firms heavily investing in their blockchain advisory practices; senior lawyers and compliance professionals adding this expertise to their skill sets; and a pipeline of law students and junior lawyers clamoring for training and career opportunities in FinTech.
Nothing new and innovative comes without risk. But any cryptocurrency strategy can be defined within a company’s risk tolerance and reap true rewards, as long as there is the right leadership and culture of compliance. This is not the time to cut corners or rubber-stamp initiatives with the legal department. If it’s budget season for your company, now is the time to add cryptocurrency expertise to your legal leadership roster. You will not regret it.