From eliminating financial inefficiencies and redundancies to managing debt, investments, funding, and collection processes, corporate treasury management teams are in charge of an ever-growing range of responsibilities. 

At the same time, the world of corporate finance and treasury management is undergoing significant changes, most of which have been brought on by the advent of digital assets such as cryptocurrency. 

Here is all you need to know about the relationships between Stablecoins and corporate treasury management to fuel your company into its financial future. 

Stablecoins: An Overview

Let’s start by clarifying what stablecoins are and what sets them apart from other cryptocurrencies. 

Just like most other digital currencies, stablecoins are backed by a blockchain infrastructure that allows for the immutable recording of transactions. However, unlike most crypto coins – including popular ones like Bitcoin and Ethereum – stablecoins’ market value is pegged (or tied) to a related commodity. 

Depending on the type of stablecoin, the underlying asset that maintains the coin’s price stable can be gold, currencies like the US Dollar (such as in the case of Tether), other cryptocurrencies, or an algorithm. 

Although businesses can benefit from using any crypto, stablecoins provide price stability, protection against sudden losses, and high-yield opportunities. 

If you’re on the hunt for corporate coins, your search ends here! Discover a treasure trove of exclusive corporate coins, each with its own unique story and significance. Whether you’re a collector, a business enthusiast, or someone looking for distinctive corporate gifts, our curated selection offers a diverse range of beautifully crafted coins to meet your needs. Explore our collection today and find corporate coins here to add to your repertoire or commemorate a special occasion.

When exploring the benefits of cloud-based application development, it’s essential to understand the various cloud based application types and the platforms available for development. Learn more about these cloud-based application types and find the right platform for your project’s needs.

Stablecoins Reduce Investment Risk and Prevent Sudden Loss of Value

To understand how valuable stablecoins can be in the corporate treasury management field, it is enough to look at how other cryptocurrencies behave. Even popular coins such as Bitcoin tend to suffer from significant and sudden price fluctuations.

In the case of BTC, the coin’s price jumped from $6,400 to nearly $65,000 in just over one year, plummeting to 50% of its value in the next two months. 

The high levels of volatility of standard cryptocurrencies are due to the fact that the price of these coins changes mostly according to supply and demand and investor sentiment. Oppositely, the value of stablecoins reflects the slower and more predictable fluctuations of their underlying commodity, such as fiat currencies or precious metals, thus reducing investment risk for companies looking to use crypto for their financial transactions. 

Crypto Can Be Purchased, Held, and Transferred Seamlessly

Another great advantage of using stablecoins in corporate treasury management is that cryptocurrencies can be easy to purchase, trade, and transfer. 

For example, it is possible to buy digital currency on SoFi and other user-friendly Fintech solutions, a process that is much more straightforward than buying, holding, exchanging, and transferring traditional fiat currencies. 

This is an especially important advantage for corporations looking to expand internationally or work with local partners and suppliers. 

Stablecoins Enable Faster Global Payments and Safer Storage of Digital Dollars

Using stable cryptocurrencies such as stablecoins allows companies to reduce the risks and costs involved with storing physical capital and processing mass global payments. 

Indeed, stablecoins backed by currencies such as the US Dollar allow for easy storage of digital dollars beyond geographical barriers. What’s more, cryptocurrencies hold the unique advantage of being able to complete near-instant global payments in all security and privacy. 

Stablecoins Are More Strictly Regulated

High levels of volatility are undoubtedly one of the greatest risks of working with cryptocurrency. Nonetheless, it is important not to underestimate the threats that come from investing in vastly unregulated digital currencies, including the fact that they might suddenly lose value or become banned in a certain area or country. 

Stablecoins, and the growing network of international regulations they rely on, can solve this issue. These commodity-backed coins are growing in popularity because of their unique benefits, and they have the potential of transforming the broader financial system.

Because of this, and due to a growing $153 billion market, global regulators have started to weave a net of regulations to safeguard the industry. 

Stablecoins Support Functions Such As Mass Payouts

For corporations looking to expand or tap into the global market, stablecoins are an essential tool to complete mass payouts securely, economically, and at a much faster pace. 

For example, if your company regularly pays hundreds of suppliers, employees, and contractors across multiple countries or areas, using crypto instead of traditional payment methods can help you save on processing fees and safeguard your business from fraud. 

Ultimately, like all types of financial strategies, transitioning into using stablecoins for some of your corporate treasury management functions carry some risks. Nonetheless, the benefits that these coins bring far outweigh the challenges and, with a proper risk management strategy, you’ll be able to propel your company into its financial future. 

This article was provided by José Luis Martín Cara