Utilizamos cookies para mejorar tu experiencia. Leer más
The complete guide to crypto accounts for small businesses
IMPORTANT NOTICE: This article does not constitute financial advice and is for informational purposes only. Businesses should be sure to do their own research before opening a digital asset account.
As corporate accounts with traditional banks continue to pay ultra-low yields, many businesses have struggled to find ways to store their capital that protects it from losses and generates strong passive income. As such, in recent months we have seen a number of prominent companies turn to cryptocurrencies such as Bitcoin to improve their returns.
For example, in 2020, cloud software company MicroStrategy made headlines by purchasing $425 million of Bitcoin, topping this up with a further $500 million this month from an oversubscribed corporate bond offering. To date, the firm now holds $3.3 billion in Bitcoin. In October 2020, its CEO Michael Saylor tweeted that he personally owns 17,732 BTC, which he bought at an average price of $9,882 each. At the current price of $30,799 (as of July 19, 2021), this amounts to a profit of around $370 million.
MicroStrategy’s success with Bitcoin clearly demonstrates how large businesses can profit from digital assets. However, small businesses can also take advantage of the high yields available from digital assets while reducing the risk of direct investment by opening a high-yielding digital asset business account.
For example, Yield App offers a crypto corporate account that leverages the power of digital assets and decentralized finance (DeFi) to provide annual interest rates that are unheard of in the traditional finance space. Business account holders can earn an interest of up to 18% p.a. with Yield App - 36 times the rates offered by the highest yielding traditional business savings account in the US, for example, which only pays 0.5%.
A digital asset business account allows businesses to leverage the power of stablecoins in particular to store their assets. Stablecoins are cryptocurrencies pegged to fiat currencies, such as USD Coin (USDC) and USD Tether (USDT), which are both pegged to the US dollar. With the high yields available on stablecoins, small businesses are able to minimize risks while reaping the rewards of a digital asset business account.
It is important to note, however, that unlike traditional savings accounts, digital assets are not without risk and capital is not protected against losses. A risk assessment and thorough research are essential before opening a digital asset corporate account.
How to start the crypto account journey for a small business
In order to take advantage of these opportunities, a small business owner will have to first open a digital asset business account with a cryptocurrency exchange or digital wealth platform that offers that option. Comparing the market can help small business owners find the corporate account with the highest yield.
Some of the top accounts on offer include:
- Yield App, which offers up to 18% p.a. on USDC, USDT and DAI, up to 12% on Ether (ETH) and up to 12% on Bitcoin (subject to fund availability)
- Nexo, where users can earn up to 12% p.a.
- Celsius, which has annual interest rates ranging from 2% to 18%
- BlockFi, which pays up to 9.5% p.a. and offers card services
- Linus, which converts all deposits to USDC
- YouHODLer, which offers a wide range of digital assets
It is important to open a business account rather than a personal account for business needs for many reasons. For example, this will often provide a small business owner with higher funding limits and better customer support. Yield App has a dedicated corporate team for business clients to facilitate B2B onboarding and answer any questions in a timely manner.
Once the digital asset business account is registered, the next step is to add assets. Transferring assets that are already in the digital asset ecosystem will make the process much smoother. If these funds are in traditional assets, then you will need to “on-ramp” them into the digital asset ecosystem through an exchange or through your chosen business account provider, depending on your options.
Keeping your crypto business account safe
Safety is naturally a big concern for any business and especially when it comes to digital assets, which are unregulated globally and therefore do not fall under mainstream financial protection schemes. However, there are ways to both protect your capital and mitigate the volatility associated with digital assets.
Digital asset business accounts usually employ several layers of security. This can include dividing assets between hot (online) and cold (offline) storage and conducting thorough due diligence before deploying assets. Yield App, for example, employs a strong five-pillar risk assessment approach to ensure client assets remain as secure as possible.
To achieve this, Yield App partners with reputable compliance specialists and legal advisors, and uses risk modelling tools to ensure the safety and security of your assets. The portfolio managers follow a strict due diligence and diversification approach to minimise the risk in single positions.
It may seem daunting for a small business owner to venture into the world of digital assets, but the low savings rates available from traditional banking make digital asset business accounts with interest rates of up to 18% look particularly attractive. With a growing number of online tools and information available to help them get started, small businesses can begin earning passive income in no time.