Paystand uses crypto to hedge against inflation

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As a blockchain infrastructure based company since its inception in 2013, Paystand has a unique look at what is happening in blockchain and crypto. Now, this blockchain-enabled business-to-business (B2B) payments provider is showing its understanding of crypto in another way – by buying ether on its balance sheet.

“Companies are increasingly asking us what the role of crypto and blockchain is for their business,” Jeremy Almond, CEO of Paystand, told PYMNTS. “So what we wanted to do with this announcement was describe a bit of how Paystand sees it internally as a leading indicator of how the most progressive CFOs can get ahead of management. that takes the world. “

Create capital preservation

One thing that stable, established businesses are trying to understand is the role crypto and blockchain technologies can play in preserving capital. Almond said Paystand put the crypto on its balance sheet as part of its asset allocation to hedge against inflation, which sits north of 6% year over year.

“You have to think about it, as cash, and so one of the things most modern companies do is hedge with high growth, high risk adjusted assets like crypto,” Almond said.

He noted that these assets can be volatile in the short term, but the crypto has risen 36% in the past six months, 170% in the past year, and 600% in the past three years.

“So if you think about that in relation to just holding cash, if you have a risk-adjusted asset in a small percentage – 1%, 5% – to balance the capital loss due to inflation,” it actually tries to create a neutral perspective. cash, ”Almond said.

A look at a new form of assets

Almond added that state-owned companies are now allocating $ 75 billion in crypto to their combined ledgers.

“We’re not suggesting companies do it; it is not investment advice, ”said Almond. “What we’re doing is saying that Paystand is someone who’s been in a front row seat for seven years, who’s accumulating and so now we’re talking about it publicly.”

Almond said most companies look at 1% or 5% as a hedge against 5%, 6% or 7% inflation.

“Companies should reinvest in their own growth,” Almond said. “This should be the main focus of the business. But you also want to make sure that you don’t reduce your investable assets.

Get smart about what crypto can do

Paystand CFO Scott Bennion added that the company has cryptos on its balance sheet for operational reasons – to make the blockchain work – and to be ready to support clients who may have digital assets in the future.

For example, if a client has crypto that they don’t do anything with, it’s possible that Paystand could take it and provide a cash product that would provide some sort of return, Bennion said.

“We are already a strong and reliable supplier to our customers,” Bennion said. “The fact that we are working internally with crypto means that we are getting smart about the things we can do with crypto and when the time comes, we will be ready to deploy it to our customers. “

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