1.2 Why Use Digital Assets?
Digital assets have the potential to transform the underlying
infrastructure and platforms of many commercial activities, partly because of the
benefits of the underlying technology. While not yet universally adopted, these
assets can be used for recordkeeping, payment processing, investments for corporate
treasury purposes, or even as a form of central bank currency. Currently,
“cryptocurrencies” are by far the most popular form of digital assets.
Some rationales behind using digital assets may include:
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They may provide access to new demographic groups or customer bases.
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A greater awareness of the crypto industry and blockchain technology can introduce new investment and liquidity options through traditional investments that have been tokenized.
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Companies may create and sell NFTs as a way to increase their brand recognition and awareness to their products, which could in turn lead to new revenue streams.
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Certain options are available with digital assets but not with fiat currency. For example, programmable money can enable real-time and accurate revenue sharing while enhancing transparency to facilitate back-office reconciliation.
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Important clients and vendors may want to transact by using digital assets.
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Digital assets provide a new avenue for enhancing a host of more traditional treasury activities, such as:
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Enabling simple, real-time, and secure money transfers 24 hours a day, seven days a week.
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Helping strengthen control over the capital of the enterprise.
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Managing the risks and opportunities of engaging in digital investments.
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Using certain digital assets as treasury reserve assets.
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Digital assets may serve as an effective alternative to cash, since cash may lose value over time as a result of inflation. This may be true in developing nations experiencing hyperinflation. However, clear volatility risks also need to be thoughtfully considered.
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Using digital assets in daily operations could help entities develop new ways to innovate commerce. In addition, entities may be able to extend their reach in the marketplace — not only to new customers but also to new counterparties.
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Tokenization of real-world assets to bring the benefits of blockchain technology to existing transactions.