“It is a great solution to a real world problem facing businesses today — international reimbursement,” Expensify said. “Previously, our US [clients] with international employees or contractors were incurring currency conversion or wire transfer fees to the tune of 4% in some cases.” Bitcoin transfers are also secure and fast, the company added.
Expensify has not released any official numbers on client participation rates, but Marketing Lead Ryan Schaffer says there are far more employees requesting bitcoins than companies willing to reimburse expenses in the digital currency.
Indeed, some companies are far more circumspect about integrating bitcoins into their business. One reason: Bitcoin has a reputation for being the currency of choice for those who make illegal purchases, which makes the U.S. governing agencies suspicious of all organizations that use it. Another problem is the possibility that other countries may decide to follow Thailand’s example and block bitcoin trade, which undermines its value as a globally accepted currency. The biggest obstacle to widespread adoption, though, is Bitcoin’s volatility.
The price fluctuations for bitcoins were particularly dramatic in 2013. At the beginning of the year, the digital currency was trading at a value of $13. On April 10, it hit $266. Trading had to be halted by Mt. Gox, a Japan-based exchange that handles a large percentage of bitcoin trade, twice within a week due to the flurry of activity. Bitcoin then settled at around $77. These wild swings deter people from relying on the digital currency the way they do on fiat.
Pyry Lehdonvirta, CEO of SC5, says the Finnish software company’s policy of allowing employees to receive their salaries in bitcoins hasn’t worked out as planned. SC5 developer Martti Malmi created the first Bitcoin user interface, so the company had an incentive to push the digital currency. But Lehdonvirta says that he, like most of SC5’s employees, “stopped taking salary as bitcoins around March” because of the currency’s volatility. He says the intent behind the offer was “to help people spend bitcoins and get into the ecosystem,” not to do have them feel like they’re “plac[ing] bets in a casino.” Even those who like to gamble usually don’t wish to do so with their salaries.
Digital currency has to achieve stability to become useful as currency, and the key to stability is more widespread use and liquidity. That’s the underlying principle of OpenCoin’s contribution to digital currency, Ripple. Ripple can process payments in any form of currency, including bitcoin, with no transaction or foreign exchange fees, within five seconds (as opposed to 10 minutes for processing bitcoins). Ripple’s monetary unit, XRP, functions as “a universal translator” for currencies.