When an eCommerce brand is onboarding a third-party supplier or manufacturer before launching a new product, smart contracts powered by blockchain technology and cryptocurrency can help them avert future supply chain disruption due to slow payments or authentication processes.
That’s just one way successful multinational firms are leveraging cryptocurrencies’ unique features as part of their growth strategies, according to “The Corporate Treasury Shift,” a PYMNTS and Circle collaboration based on a survey of 250 multinational financial institutions.
Get the report: The Corporate Treasury Shift
In fact, PYMNTS research shows that 58% of firms that operate in six or more markets use at least one cryptocurrency.
Powering Smart Contracts
For multinationals, cryptocurrency offers unique benefits for cross-border commerce. In the report, PYMNTS identifies three ways multinational firms are using cryptocurrency.
One is deploying blockchain technology and cryptocurrency to power those smart contracts that global businesses use to accelerate cross-border commerce.
Smart contracts are programmed to identify specific conditions that require certain responses based on data stored on a blockchain. Smart contracts are self-executing, auto-verifying codes that allow organizations to swiftly initiate and authenticate transactions at scale.
Transforming Mobile Wallet Usage
The rise of cryptocurrencies as a viable payment option has altered mobile wallets’ future, as cryptocurrency users leverage mobile wallets’ convenience to shop on international eCommerce sites and send money across borders.
Incorporating cryptocurrency functionalities provides eCommerce brands with a simple workaround for significant barriers to cross-border including currency and exchange rate headaches.
Cryptocurrency transfers are low-cost and secure, making it easier for consumers to shop globally at “local” prices while paying or receiving funds seamlessly.
Secure Onboarding, Transactions
Blockchain technology and cryptocurrency also make knowing your customer (KYC)/know your business (KYB) onboarding and transaction management easier. Corporations with cross-border operations understand that a comprehensive onboarding process is essential for regulatory compliance under current KYC/KYB mandates.
Blockchain tech allows organizations to authenticate users swiftly and securely, while cryptocurrency can enable organizations to speed cross-border payments, including deposits and advance payments that ensure vendors and contractors can fulfill their obligations.
Future-Proofing Trade, Commerce
Blockchain technology and cryptocurrency also have other use cases for cross-border payments, such as remittances, Dante A. Disparte, chief strategy officer and head of global policy at Circle, told PYMNTS in a November 2021 interview.
With a nod toward the technology underpinning stablecoins’ issuance and maintenance, Disparte said blockchain-powered solutions “enable people to have more control and more optionality with how they send, spend, save and secure their money.”
Most financial institutions and corporations with cross-border businesses see virtual currencies as a permanent part of their clients’ futures and their own.