Crypto for Cross-Border Payments Backed By Half of Multinationals, New Study Shows

While the embrace of blockchain technology and use cases for digital currencies are clearly disruptive and rising quickly, nowhere has this budding asset class received a more important early endorsement than from multinational corporations.

This, as the Cryptocurrency, Blockchain And Global Business: Assessing The Potential For Multinational Companies And Financial Institutions report, done by PYMNTS in collaboration with Circle, showed half of these sophisticated businesses are already onboard the crypto-train — at least when it comes to facilitating cross-border payments to their trading partners around the world.

Read more: 58% of Multinational Firms Are Using Cryptocurrency

According to a survey of 250 executives at multinational businesses as well as 250 financial institutions (FIs), 50% said they are either already using crypto to pay partners or are planning on doing so, a figure that is more than double the rate of the companies who said they held digital assets for investing and asset management purposes on their balance sheets (21%).

In addition, the survey found that these global traders were six times more likely to use cryptocurrencies to conduct transactions than to hold them as investments.

The B2B Uptake Rate

To be sure, the ability for individuals to spend crypto may be growing rapidly, but it still accounts for only a tiny fraction of total consumer consumption. One fact that makes the B2B uptake rate even more notable is that it is happening early in the game, so to speak, at a time when the multinationals themselves concede there is still a lot to learn about the space.

According to the survey, even though leaders at FIs and multinational firms said they were not entirely confident in their knowledge of blockchain and cryptocurrency technologies, they still were willing to commit resources and staff to it with an eye toward identifying new use cases and greater efficiencies. In fact, 95% of FI respondents and 54% of big businesses said they already had staff in place dedicated to this purpose, even though one-third of respondents described their understanding of digital currencies as “slightly or not at all.”

The substantial support from multinationals for crypto cross-border payments coincides with other PYMNTS research that showed B2Bs in general are in the throes of a major digital shift, both for themselves and often requiring the same with their business partners.

Specifically, the Enabling B2B Payments For The Virtual Workforce study projected that up to 80% of all buyer-supplier transactions could be done digitally by 2025, amidst a broad revamp of corporate payments ecosystems alongside a quest for improved efficiencies and better controls on spend management.

See more: Virtual Cards Help Companies Manage Spend in Real Time

“The [pandemic] has brought attention to the need to review expenses so having a system or tool that makes it very simple to provide that oversight and transparency and accountability into what they are spending is crucial now,” Caleb Jenkins, leader of client accounting services for tax and accounting firm RLJ Financial, told PYMNTS.

While there are sure to be more bumps in the road ahead, it is clear that there is still plenty of room for further uptake of digital currencies, as the PYMNTS-Circle report showed only 10% of FIs currently offer one or more types of cryptocurrencies, but nearly 75% said they expect those digital offerings to go up over the next year.