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Choosing the Best Crypto Wallet for Business

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The cryptocurrency sector is not a solely tech geek’s space anymore – now it attracts the attention of businesses and corporations in different sectors and expands its application day by day. Companies embracing digital assets and blockchain technologies span from e-commerce to large banks, funds, and fintech firms. As they all explore the advantages of crypto assets, the need for secure financial operations increases.

One of the crucial decisions a company should make when integrating crypto into its ecosystem is setting up a safe and convenient crypto wallet for business. This article explains the existing types of corporate crypto wallets and features to consider when choosing one.

What are Crypto Wallets?

Like having a bank account with the possibility to move funds and conduct payments, crypto wallets serve as storage for digital assets with the opportunity to manage and transact assets at a user’s disposal. Similar to accessing a bank account, crypto wallet users need a strong password or code; in a crypto wallet, these are private and public keys. These keys include alphanumeric characters acting as passwords. The private key belongs exclusively to its owner and is kept secret. The public key (as its name suggests) is used for receiving digital assets from others – a kind of identifier you send to others for asset transactions.

Hot Wallets vs. Cold Wallets

A cold wallet (or hardware wallet) stands for somewhat “passive” asset holding, whereas you keep crypto coins offline and connect to the Internet sometimes when you need to proceed with transactions. These are physical devices holding your assets offline, representing the safest way for long-term corporate reserves storage. An example of a cold wallet is Ledger.

In contrast, a hot wallet is an online wallet. Such wallets are always connected to the Internet, providing ease of use in everyday trading activity. Hot wallets are suitable for companies that need daily transactions and traders who actively participate in the market, where time is of the essence. The drawback of hot wallets is their vulnerability to cyber attacks, due to their stable connection to the network. An example of a hot wallet is the Trezor wallet.

Custodial vs. Non-Custodial Wallets

Using a custodial wallet means entrusting your private keys to a wallet provider (that may be a crypto exchange or specialized wallet service provider). This means that a third party has control over a user’s private keys, thus, claiming its responsibility for asset safety. Wallets provided by crypto exchanges are often user-friendly, offering users easy onboarding. Examples of custodian wallets are the WhiteBIT wallet, Gemini, or Binance wallet.

Non-custodial wallets reflect the decentralized nature of cryptocurrencies, for they give users full ownership of their private keys and provide a high level of anonymity. On the other hand, when choosing a non-custodial wallet, a user takes full responsibility for their assets’ safety.

Wallet Features for Businesses

When choosing among business crypto payment solutions, a company should focus on the following aspects:

  • Crypto wallet security is the key aspect for a company operating large amounts of assets. No doubt, that a cold wallet is the best option, for in this case, private keys remain with the asset owner. However, many businesses need to transact their assets daily, so a reliable and convenient hot wallet would fit better. To secure cryptocurrency transactions, one should consider the option of web multi-signature wallets. Such wallets demand several signatures for transaction approvals, which is suitable for companies that require approval from multiple parties before making transactions.
  • Compliance is another factor to consider. Reliable crypto wallet providers comply with AML rules. Anti-money laundering compliance includes tracking transactions and reporting any suspicious operations, protecting businesses against illegal actors and financial crimes.
  • The reporting function is essential for efficient digital asset management. Convenient financial reporting tools can streamline business processes, saving time and resources.
The right decision on a wallet should also rely on what type of crypto a business uses and how often transactions are supposed to occur. For example, if a company aims to hold corporate treasury, the best option will be a Ledger wallet or a wallet with a multi-sig solution. Additionally, businesses may consider platforms that offer staking services, such as Newton staking, to earn rewards on their crypto holdings. If the goal is to actively send and receive funds for efficient cooperation with counterparties on a daily basis, then a reliable custodial wallet would perfectly meet the needs of your business. Just make sure it provides convenient account functions, like reporting, and complies with existing AML regulations in the region you operate.

With the variety of crypto wallets existing on the market, companies need to find the best solution balancing compliance with regulations, convenience, and safety. By finding the right wallet or combining different wallet types for different needs, a company gets its processes streamlined, getting the most of the benefits of digital assets.

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