By Erik Sherman
June 29, 2021
The good news for cryptocurrency is that El Salvador decided to adopt it as legal tender and the Basel Committee on Banking Supervision issued a proposal to let banks handle digital assets like Bitcoin.
The bad news for corporations? Multiple. When something is legal tender, you must have a way to handle it; the banking proposal shows how unpredictable the values of cryptocurrencies are; a major crypto exchange is getting hit hard by countries refusing to allow it entry, and, as Tesla may well show, when a company holds crypto and the price drops, it can mean a balance sheet hit, even if the coin rises in value again.
Cryptocurrencies are an interesting and developing intersection of finance and technology. But corporations, even when exploring opportunities, must respect and manage risk. There’s plenty of it going around with Bitcoin, Ethereum, and all the other coins and associated exchanges.
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