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CFOs can’t avoid crypto—and 20% of large companies will use it in some way by 2024

June 7, 2022, 10:42 AM UTC

Good morning,

Crypto may be crashing—but don’t expect the pressure on CFOs to know their stuff to lessen anytime soon.

“Our projection is that by 2024, at least 20% of large enterprises will use digital currencies for either payments, stored value or investments,” said Avivah Litan, distinguished analyst and vice president at research firm Gartner.

The progression of digital currencies will continue despite crypto’s recent downfall, Litan said. “Bitcoin has gone down 32% year to date,” she said at Gartner’s CFO and Finance Executive Conference in National Harbor, Maryland on Monday. “Is it really a Ponzi scheme?” she quipped. “Well, frankly, you should not conflate the value of the coin or the tokens with the value of the technology,” she explained. “Blockchain provides very unique characteristics. Cryptocurrency is the internet money we didn’t have in Web1. NFTs give users ownership over their assets. These are basic construction components for Web3. And they’re here to stay.”

Large corporations Apple, Google, and JP Morgan Chase are hiring experts and building out their infrastructure for crypto, she said. Meanwhile, “organizations that are transacting or using crypto for payments or rewards include Amazon, Dell, Shake Shack, Subway and Whole Foods,” Litan said. And “very conservative” financial institutions that are adopting crypto include BNY Mellon and State Street Bank, she said.

Litan pointed to the three different use cases: 

Stored value: “So if you believe one day they will be a hedge against inflation. You can go out and buy these cryptocurrencies.”
Payments: “If your customers are pushing you into this; if your suppliers or partners want you to transact, you can use them for payments.”
Investment: “Now investment is obviously the riskiest activity.”

Gartner conducted a global survey that found that 15% of boards of directors report that their organizations are currently planning to hold or transact in Bitcoin in the next two years, Litan said. Blockchain is “efficient and trustworthy,” she said. “It’s peer to peer; it’s immutable. And running money over these networks eliminates the middleman, and it allows a much more efficient and positive experience for the users.”

There are three types of digital currencies: crypto (like Bitcoin and Ethereum), stablecoin of which “the most of the popular ones are pegged to U.S. dollars,” and fiat currencies used by banks in digital form, she explained. So, a company can use the form of digital currency they’re most comfortable with.

But Litan advises CFOs to learn about the benefits of blockchain cryptocurrency transactions. “If you do make up your mind about a good use case for crypto, you don’t have to do it yourself,” Litan said. “There’s plenty of off-the-shelf solutions,” she said.

In May, the U.S. Securities and Exchange Commission announced it was adding 20 positions in its Crypto Assets and Cyber team, bringing the total to 50 to protect crypto investors from fraud. However, “there is really unique value in [blockchain] technology and in cryptocurrency,” Litan said. “[Even though] there’s a lot of fraud, a lot of security threats, doesn’t mean that the positive use cases won’t prevail.”


See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

Upcoming event: Fortune’s inaugural in-person meeting of the CFO Collaborative, presented in partnership with Workday, will take place at Miller Union, Atlanta, on Wednesday, June 22, at 6:30 p.m. The featured speaker for the event will be Clint Watts, senior fellow at the Foreign Policy Research Institute and NBC News National Security Contributor. Watts will share his expertise on cyberterrorism, social media influence and Russian disinformation. If you’re a CFO interested in attending, you can find the registration form here. For further information, please email CFOCollaborative@Fortune.com.

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Big deal

Supply Chain Security Gaps: A 2022 Global Research Report by ISACA explores IT professionals’ key concerns around security challenges and how their companies respond to them. Regarding risks to their supply chain, respondents reported being very or extremely concerned about ransomware (73%), followed by poor information security practices by suppliers (66%). In addition, according to the report, 30% of respondents said that their organization’s leaders do not have a sufficient understanding of supply chain risks. And just 44% indicated they have high confidence in the security of their organization’s supply chain. The data is based on a survey of more than 1,300 IT professionals with supply chain insight. ISACA is an international professional association focused on IT governance.

Courtesy of ISACA

Going deeper

When Shifting Strategy, Don’t Lose Sight of Your Long-Term Vision, a report in Harvard Business Review, advises executives to evaluate whether short-term strategic shifts proposed are consistent with the longer-term vision. And then "resist the pressure to those strategies that run counter to it," according to the report.

Leaderboard

Liz Coddington was named CFO at Peloton Interactive, Inc. (Nasdaq: PTON), effective June 13. Coddington succeeds Jill Woodworth, who has decided to step down as CFO after serving the company since 2018. Woodworth led the company through its IPO. This is the latest notable executive change since Barry McCarthy became CEO on Feb. 9, succeeding John Foley who stepped down amid the news the company would shed about 2,800 jobs, impacting approximately 20% of corporate positions. Most recently, Coddington served as VP of finance for Amazon Web Services. Prior to that, she held senior leadership roles at B2B and consumer-facing companies, including as CFO of Adara and Walmart.com, as well as VP of financial planning and analysis at Netflix. 

Dan Schumacher was named CFO at Protolabs (NYSE: PRLB), a technology-enabled digital manufacturer. Schumacher was currently serving as interim CFO at Protolabs, where he has overseen the company’s investor relations for nearly five years in various leadership roles including vice president of investor relations and FP&A. Before joining Protolabs, he held financial leadership roles at Stratasys and Rockwell Automation for more than a decade.

Overheard

"There is a fire narrative, and that fire narrative is inflation. And then there is a bit of an ice narrative, that recession talk, hard landing or soft landing. We'll have these periods where it feels awfully fiery, and other periods where it feels icy, and clients need to navigate around that."

—Ted Pick, head of institutional securities at investment bank Morgan Stanley, said during the Bernstein Strategic Decisions Conference on June 1, as reported by Fortune.

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