<h2 style="font-size: 32px; color: #0050b6; font-weight: light;" id="by-now-you-ve-probably-heard-about-bitcoin-and-other-cryptocurrencies-maybe-you-d-like-to-figure-out-how-they-might-affect-your-business-operating-in-the-united-states-but-what-actually-is-this-digital-currency-is-cryptocurrency-an-important-innovation-for-your-small-business">By now, you've probably heard about Bitcoin and other cryptocurrencies. Maybe you'd like to figure out how they might affect your business operating in the United States. But what actually is this "digital currency"? Is cryptocurrency an important innovation for your small business?
</h2>
Simply put, cryptocurrency is virtual currency backed up by cryptography.1 Bitcoin was the first cryptocurrency,2 and it is still the most well known. But there are more than 18,000 other cryptocurrencies, including well-known ones like Ethereum and Litecoin, and even those that started as a satirical joke, like Dogecoin.3
When we say cryptocurrency is virtual, we mean there are generally no physical tokens to transfer the value to others. The most common way to store cryptocurrencies is in digital wallets. Cryptocurrencies are always transferred electronically. The movement of cryptocurrency from one wallet to another is recorded in a ledger, commonly known as a blockchain. A public ledger – like Bitcoin's blockchain – is open for anyone to view.4 Private ledger systems are available only to participants and operators of that ledger.5
Another way cryptocurrencies differ from the fiat currency we traditionally use is that most are decentralized. Unlike dollars or euros or yen, most cryptocurrencies are not backed by a government.6
<h2 id="how-small-businesses-can-use-crypto">How Small Businesses Can Use Crypto</h2>
<img alt="Businesses and bitcoin acceptance" width="80%" src="https://fhb-p-001.sitecorecontenthub.cloud/api/public/content/qukfog9qrduwb0ef0qxuuw-businesses-and-bitcoin.jpg?v=ddc06f6b" />
Some businesses are finding that using crypto trading, in addition to other payment types, offers certain advantages:
<ul>
 <li>Accepting crypto payments. According to one survey, about one in three businesses now accepts some form of cryptocurrency.7 Why? Some businesses are accepting it in response to customer demand,8 while others hope to cater to future-leaning consumers by embracing what they see as the payments of the future.9 Another benefit many businesses cite is the perceived absence of chargebacks: While consumers can reverse a credit card purchase, only consumer protection regulations could reverse a transaction closed via cryptocurrency.10 (Today, few regulators at the state or federal level are enforcing reversals of crypto transactions, but companies should be aware that this regulatory space is evolving.)</li>
 <li>Paying crypto for services. When it comes to money flowing out, some businesses also feel demand pushing them toward crypto. Some employees or contract workers appreciate the speed with which cryptocurrency can be credited to them.11 Businesses with an international workforce may find that transferring crypto to workers no matter where they live is easier than transferring fiat currency across national borders.12 Companies interested in trying cross-border crypto payments should investigate all potential issues before forging ahead. For example, you can't transfer a cryptocurrency into a country that has banned it.13</li>
 <li>Offering crypto services. Maybe you would like to help customers use cryptocurrency beyond patronizing or working for your own business. For example, some businesses are dedicating a small amount of floor space to host a cryptocurrency ATM,14 where users can purchase crypto with dollars and send it to the digital wallet of their choice.</li>
</ul>
<h2 id="should-crypto-be-a-part-of-your-business-s-future">Should Crypto Be a Part of Your Business's Future?</h2>
<h2 style="text-align: center;"><img alt="Accepting bitcoin" width="80%" src="https://fhb-p-001.sitecorecontenthub.cloud/api/public/content/yv5g_uniqrizlp-ytmbd6a-bitcoin-acceptance.jpg?v=2d196c83" /></h2>
Before you decide whether to jump into the world of cryptocurrency, here are a few things to consider:
<ul>
 <li>Learn more about the current volatility of the cryptocurrency market and how to limit your exposure to that risk.</li>
 <li>Understand how cryptocurrency fraud and theft happen and how to protect your assets from that risk.</li>
 <li>Find out if your customers, employees, and/or contractors are interested in using cryptocurrency.</li>
 <li>Research the services available for helping you accept and transfer crypto and understand the tax and other financial exposures.</li>
 <li>Speak with your tax professional to make sure they are well versed in the tax filing specifics with cryptocurrencies. Educate yourself on the <a rel="noopener noreferrer" href="#NOT-2014-21" target="_blank">IRS regulations</a> and other laws related to using crypto in business.</li>
</ul>
While many small businesses are dipping their toes into crypto right now, others are taking a wait-and-watch approach. Whatever you do next, it's great you are learning more about this financial frontier right now. Keep paying attention to how it may impact your business in the years to come. 

Also, keep in mind that many of the capabilities attracting business to cryptocurrency, like speed, cross-border efficiency, trackability, finality, etc., are also available via other financial technologies, such as Instant Deposit systems. 

First Horizon's <a href="/business/commercial-banking-solutions/treasury-management/payables-and-fraud-protection/clearpath-fast-payments">ClearPath Fast Payments</a> is one Instant Deposit service that may be able to bridge your needs of today to the future of cryptocurrencies and other payment innovations. Talk to a banker today about whether ClearPath is right for your business. 

<div> </div>
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1 Coindesk. <a href="https://www.coindesk.com/learn/what-is-cryptocurrency/">"</a><a href="https://www.coindesk.com/learn/what-is-cryptocurrency/">What Is Cryptocurrency?</a><a href="https://www.coindesk.com/learn/what-is-cryptocurrency/">"</a> November 29, 2021. 
2 Coinbase. <a href="https://www.bankrate.com/investing/types-of-cryptocurrency/">"What Is Cryptocurrency?"</a> Undated. 
3 Bankrate. <a href="https://www.bankrate.com/investing/types-of-cryptocurrency/">"12 Most Popular Types of Cryptocurrency."</a> May 27, 2022. 
4 Investopedia. <a rel="noopener noreferrer" href="https://www.investopedia.com/terms/b/blockchain.asp" target="_blank">"What Is a Blockchain?"</a> March 5, 2022. 
5 Geeks for Geeks. <a rel="noopener noreferrer" href="#:~:text=What%20is%20Private%20Blockchain%20%253F,on%20third%252Dparties%20to%20transact." target="_blank">"Difference Between Public and Private Blockchain."</a> May 11, 2022. 
6 Coindesk. <a rel="noopener noreferrer" href="https://www.coindesk.com/learn/what-is-cryptocurrency/" target="_blank">"What Is Cryptocurrency?"</a> November 29, 2021. 
7 Skynova. <a rel="noopener noreferrer" href="https://www.skynova.com/blog/accepting-bitcoin" target="_blank">"Accepting Bitcoin Payments."</a> Undated. 
8 PYMNTS.com.<a rel="noopener noreferrer" href="https://www.pymnts.com/cryptocurrency/2022/as-more-consumers-buy-more-crypto-demand-for-more-ways-to-spend-it-also-rising/" target="_blank"> "More Consumers Buying Crypto and Want More Ways to Spend It."</a> May 4, 2022. 
9 Oliver Wyman. <a rel="noopener noreferrer" href="https://www.oliverwyman.com/our-expertise/insights/2021/sep/how-gen-z-shops-and-pays.html" target="_blank">"How Gen Z Shops and Pays."</a> Undated. 
10 Blockchain.com. <a rel="noopener noreferrer" href="https://support.blockchain.com/hc/en-us/articles/211162263-Can-my-transaction-be-canceled-or-reversed-" target="_blank">"Can My Transaction Be Canceled or Reversed?"</a> Undated. 
11 Nium. <a rel="noopener noreferrer" href="https://www.nium.com/resources/gig-workers-demand-real-time-payments" target="_blank"> "Gig Workers Demand Realtime Payments."</a> November 1, 2021. 
12 Readwrite. <a rel="noopener noreferrer" href="https://readwrite.com/paying-employees-with-crypto-can-your-business-do-it/" target="_blank">"Paying Employees With Crypto: Can Your Business Do It?"</a> July 25, 2021. 
13 Cryptonews. <a rel="noopener noreferrer" href="https://cryptonews.com/guides/countries-in-which-bitcoin-is-banned-or-legal.htm" target="_blank">"Countries Where Bitcoin Is Banned or Legal in 2022."</a> Undated 
14 SmallBusinessSense. <a rel="noopener noreferrer" href="https://small-bizsense.com/what-are-the-advantages-of-hosting-a-bitcoin-atm-at-your-business/" target="_blank">"What Are the Advantages of Hosting a Bitcoin ATM at Your Business?"</a> Undated

What Small Business Owners Need to Know About Crypto

Crypto is becoming an important tool for many small businesses. Here's what to think about as you consider accepting and making payments in bitcoin and other cryptocurrencies.

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