What is crypto treasury management?
Crypto treasury management is the management of the financial assets that are in the form of digital currencies for a business or individual, including the financial instruments and concentration and disbursement activities, among others. This type of management of financial assets differs from traditional Treasury management, which relies on fiat currencies and conventional financial instruments such as derivatives, stocks, and bonds.
Effective crypto treasury management should safeguard the benefits that a business or an individual crypto investor derives from blockchain and the crypto space, including the significant transformation in international payments, the redefinition of the way businesses transact globally, transaction speed, transparency, traceability, cost reduction, and security, among others.
If crypto treasury management heralds the foregoing benefits for businesses and individuals, then why consider opting for transforming it? Every crypto bookkeeper who has experience with crypto treasury management or working with crypto accounting software will tell you that the transformation of crypto treasury management is an inevitable reality because of the challenges experienced in the associated bookkeeping, as succinctly unveiled below.
Challenges businesses experience with crypto-treasury management
Some of the challenges that businesses and bookkeepers have reported arising from their adoption of crypto treasury management include complexity, challenges relating to tax and regulation, a lack of awareness about blockchain technology, and issues with confidentiality, among others.
- Complexity
Blockchain and digital assets tend to be really complex areas to navigate for many businesses and individuals. This makes understanding and implementing a crypto treasury management solution quite challenging if proper guidance on the approaches to adopt as well as the software and crypto artificial intelligence (AI) tools to look out for is not available.
- Challenges relating to tax and regulation
The unclear regulatory framework that exists with respect to cryptocurrencies often challenges bookkeeping in the crypto space. Businesses and individuals investing or intending to invest in the crypto space usually find this challenge very demanding for their operations, especially when it comes to cryptocurrency-related tax compliance.
- Lack of awareness about blockchain technology
Many businesses and individuals are still ignorant about the benefits that blockchain technology could herald for them. That includes appreciating the benefits that daring investors are deriving from accepting and executing crypto-related payments. This lack of awareness about the merits of blockchain technology is hindering businesses and individuals from integrating blockchain as part of their treasury management tools.
- Issues with confidentiality
Questions are being asked regarding how blockchain can be verified by the public and yet remain anonymous for the transactions of a business and an individual investor. Most businesses and individual investors are then held back by this fear of non-confidentiality when it comes to crypto treasury management.
Combating the challenges in crypto treasury management
The challenges that businesses and individual investors in the crypto space grapple with can be dealt with using good bookkeeping software and crypto AI.
Great crypto bookkeeping software and crypto AI will give you the opportunity to generate as many wallets and crypto addresses as you want for incoming payments. This allows you to allocate one address to each unique partner or even to each invoice. In the case of outgoing payments, crypto AI can help you process them from an omnibus account so that the recipient is prevented from tracking your funds or your wallet balance. This combats the challenge relating to confidentiality.
You can transform your crypto treasury management by finding a great crypto bookkeeping software or crypto AI accounting solution that assures you of privacy so that your recipients don’t track your funds or wallet balance; security by ensuring that your funds are held in a secure account that is not linked to your individual wallet addresses; and convenience so that you can easily manage your outgoing payments from a single account.
Need help to transform your crypto treasury management?
Transforming your treasury crypto management with crypto bookkeeping and crypto AI, as shared above, can be challenging for businesses and individual investors that are new in the crypto space. Even established businesses and individual investors may require an expert opinion when it comes to the transformation of their crypto treasury management.
One of the big learnings I have about success in the crypto space and with crypto treasury management is having an expert in crypto bookkeeping, accounting, and treasury management to consult with when in doubt. Experts like Entendre Finance are always ready to help crypto businesses and individual investors make informed decisions. Talk to them today and let them assist you in transforming your crypto treasury management using tested crypto bookkeeping software and crypto AI.
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