The union of both blockchain and crypto technologies presents SMEs with multiple ways to tackle the inherent impediments limiting the growth and competitiveness of SMEs.
From scarcity of funds to clumsy supply chain management and complicated regulatory landscapes, the world of virtual currencies has had a tremendous impact on Small and Medium-Sized Enterprises in recent times.
Increased Operational Efficiency, Enhanced Transparency and Trust
Blockchain technology is prized for its unchallenged ability to create a crystal clear, indisputable, and safe ledger for transaction recording.
This trust is considered important for SMEs looking to encourage healthy interactions with collaborators, suppliers, and customers.
When SMEs adopt a blockchain-based system, their complicated supply chain will begin to experience real-time visibility.
This in turn ensures the genuineness of products, curtails imitating, and gives end users the needed insights to make well-informed decisions concerning purchasing.
Multiple Means of Payment
The modern business world is rapidly evolving and technological advancements and innovations are considered to be the major force behind many transformative changes.
Crypto solutions and blockchain technology are listed among these ongoing transformations and are fast becoming tools with the capacity to reshape and reform industries across the globe.
An apt example is the BTC bull token, the unstoppable force propelling Bitcoin to greater heights.
When small businesses incorporate multiple payment methods into their system, the business will gain international visibility which attracts more clientele.
Supply Chain Management Revolutionization
It is common knowledge that the supply chain for Small and Medium-Sized Enterprises is pervaded with ineptitudes because of the disorderly coordination of its stakeholders.
However, recent studies have revealed that incorporating blockchain’s decentralized nature and virtual currency solutions into the sector’s operational fabric has the unlimited potential to reveal innumerable opportunities.
Blockchain’s decentralized nature engenders the emergence of incorruptible records for each of the stages in the SME supply chain.
This removes delays, expedites real-time tracking, mitigates fraudulent activities, and invigorates collaboration with all stakeholders including manufacturers, suppliers, distributors, retailers, and more.
Decentralization and Lesser Transaction Costs Boost Growth
Cryptocurrency’s decentralized nature favours SMEs as it permits finance management without major restrictions.
With blockchain technology, small businesses are at liberty to circumvent the intricate mesh of bank-to-bank transfer and this is not just quicker but cost-effective.
The momentous computational power of blockchain permits users to effect transfers within minutes.
For Bitcoin miners, 10 minutes is enough to facilitate and confirm wallet-to-wallet transactions. Litecoin and Ethereum can do the same in 20 seconds.
Opens New Landscapes for Customer Engagement
Furthermore, embracing blockchain technology and cryptocurrency solutions as the medium of payment opens up new horizons for customer engagement as well as retention.
When small and medium e-commerce businesses integrate virtual currency payments, customers across different countries can be enabled to effect seamless financial transactions without having to worry about exchange rates.
This approach will extend a firm’s customer base as well as position it as a forward-looking enterprise within the digital economy.
By so doing, excess cross-border transaction fees will be eliminated.
Blockchain Technology and Cryptocurrency Solutions make Financial Access Easier for SMEs
For the SME sector, acquiring credit facilities from banks and financial institutions has always been a perpetual stumbling block because of the high interest rates charged by these institutions.
However, crowdfunding platforms powered by blockchain and cryptocurrencies present SMEs with alternative routes.
Small and medium-sized businesses can now leverage a universal network of investors to amass the needed capital to fund their business ventures.
This can be achieved through STOs (Security Token Offerings) and ICOs (Initial Coin Offerings) while democratizing business opportunities.
Nothing hinders a start-up in need of funding to launch an ICO in a bid to raise capital.
All he needs do is issue utility tokens granting access to his platform’s services and once it develops, the start-up will be poised to attract investors on a global scale.
With this, the start-up can secure enough funds while bypassing customary funding methods through the banks.
Conclusion
It is no doubt that virtual currency solutions and blockchain technology have played vital roles in reshaping the Small and Medium-sized Enterprise sector.
While crypto may take time to go mainstream, nothing stops SMEs from benefiting from the market.
(Image from pixabay licence free https://pixabay.com/photos/cryptocurrency-business-finance-3085139/)
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