Citibank Says Crypto Assets Are Refining The Complete Payment Infrastructure

Citibank (a multinational financial institution) states in its latest report that cryptocurrencies are reformulating the whole infrastructure of payments. It further mentioned that the virtual assets had advanced a lot from being just some “internet novelty” to turn into a market of more than $2 trillion.

The requirements for institutional-level crypto adoption

The report provides a blueprint, outlined in three main aspects, for the adoption of cryptocurrency investments or payments for interested organizations in digital assets to be a store-of-value. The first point is that the team for the accounting of cryptocurrencies should possess adequate instruments to be utilized for crypto. The second requirement states that the virtual assets which are suitable for the organization should be selected appropriately. The third need relates to the institutional decision about the holding of specific cryptocurrencies on its balance sheet.

The report disclosed that there was a time when cryptocurrency was only considered as a vague innovation on the internet; however, today, it has been developed to a great extent. Regardless of the assumptions that this type of currency would disrupt the payment system, crypto has created a new mode of thinking about accounting, processing, and payment infrastructure along with the surging acceptance of it as a store-of-value, as further revealed by Citibank’s report.

Issues in crypto adoption

Citibank also provides two methods for accepting crypto payments known as Agent Model and Direct Model. In an Agent Model, a third party is needed to gather the digital assets for an institution, whereas the Direct Model allows the organizations to hold as well as control the wallets and private keys on their own. Nonetheless, managing the price volatility is an ever-increasing problem for financial institutions. At adopting crypto, the respective institution appears to reset its price at the suitable functional point. Subsequently, the price is altered in crypto instead of fiat currency.

Although this instrument is used by the organization to meet the price risk, the genuine risk remains at the end of a crypto remitter who is usually the consumer of the respective organization. This report is considered to be the newest from the analysts of Citibank. Previously in March, the bank released a report of 100 pages that noted Bitcoin as capable of becoming the type of currency to be largely selected by international trade because a considerable interest has been shown by the financial institutions regarding the crypto market.

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