The Rug Republic, a domestic décor business, has begun taking major cryptocurrencies as payment for its purchases, capitalizing on the newest cryptocurrency craze. While the brand ships internationally, this payment method is presently only accessible in India.
According to reports, the Delhi-based décor business would accept payments for its items in the top 20 cryptocurrencies by market capitalization. Although it plans to create an in-house cryptocurrency payment system, the firm now uses the WazirX and Binance platforms for cryptocurrency transactions.
Although global heavyweights such as Tesla, Microsoft, and Paypal have all accepted this method of payment, Indian businesses remain hesitant. Approaches to how firms entering the cryptocurrency market confront uncertainty and unknown risks in the hopes of profiting from the advantages.
Taking a hands-off approach: It is about receiving bitcoin payments through third-party networks and then converting them to fiat money. This allows the firm to retain its digital products of the financial sheet while causing minimal interruption to its business controls. Exchanges and third-party merchants sometimes offer cheaper service fees than credit cards, making cryptocurrencies an appealing choice for companies. Meanwhile, businesses may incorporate bitcoin into their own systems, as The Rug Republic intends to do.
“The third-party vendor, which will charge a fee for this service, handles the bulk of the technical questions and manages a number of risk, compliance, and controls issues on behalf of the company,” Deloitte said in a blog post. “That does not mean, however, that the company is necessarily absolved from all responsibility for risk, compliance, and internal controls issues. Companies still need to pay careful attention to issues such as anti-money laundering and know your customer (AML and KYC) requirements,” it stated.
Taking a hands-on approach: Cryptocurrencies are held as digital assets by global corporations like Tesla and Microsoft. This would also make it easier for businesses to incorporate bitcoin into their existing financial institutions, such as banking and investment. In addition, the firm can hire a third-party supplier to manage its virtual currencies, or it can connect it using its own infrastructure and secret key.
“Self-custody presents more complexity and requires deeper experience. Moreover, if the company follows this route, it will likely have greater accountability for the work supporting its transactions. That said, much, if not most, of what follows will also be applicable to companies that self-custody,” Deloitte estimated.
While bitcoin aficionados wait for the Cryptocurrency Bill to be introduced in parliament for debate during the forthcoming Monsoon session, which starts on July 19, the cryptocurrency space has been plagued by uncertainty as banks are wary of processing digital currencies.
Customers of major Indian banks such as HDFC Bank and State Bank of India have been warned not to use their services to trade in cryptocurrencies. Banks have warned clients that dealing in virtual currencies might result in account suspension, citing a Reserve Bank of India circular dated 2018. The circular was notably overturned by the Supreme Court in March this year. Whilst bitcoin is legal in India, having rules in place would assist Indian firms in making educated decisions about how to successfully integrate digital assets into their operations.