- 21 Nov
A Request To Fund Crypto Currency Invoices
We have just had a request in to provide funding against some invoices that are payable in cryptocurrency.
Invoice Finance For Cryptocurrency Payments
It's early days with this particular enquiry, but it appears that the transactions are being quoted, and invoiced, in US Dollars (USD) - but that the transactions are to be paid in some form of crypto. This could be Bitcoin or any of the other alternatives. This could be an attempt to avoid possible price volatility within the crypto value, by quoting a price in USD, a more stable currency.
The use of this type of payment will mean that the field of potential funders will be significantly smaller than normal, as very few of them are able to accomodate payments via crypto currencies.
I have written previously about some developments regarding the use of crypto within our sector. Notably an article that was sent to me about the benefits of blockchain , the basis for cryptocurrencies, and it's application to invoice finance. Also I have mentioned the news that we added Populous to our panel of funders. They are thought to have completed some of the first cryptocurrency based invoice finance transactions.
It is very much an emerging sector. Most funders are at least aware of the potential for it to become more mainstream, however they are largely holding back to see how it develops and whether it takes off. It has to be said that it is rare to receive enquiries regarding crypto transactions.
One of the most significant issues is the current volatility of crypto, as mentioned above. It means that a price quoted one day can change dramatically the next day. Bitcoin for example is currently valued at 8.148.8 against USD but the 52 week range has been from 3,216.1 right up to 13,764 - huge fluctuations that could see large swings in the value that you received for goods and services supplied. This is why less volatile "flat" currencies - such as USD - are preferred for pricing sales.