A cryptocurrency is a digital asset whose allocation and transfer are documented using cryptographic methods in a decentralized or distributed network. Unlike euro cash, a cryptocurrency such as Bitcoin is not issued or guaranteed by a central bank. In English, "cryptocurrency" is the common term; the separate spelling "crypto currency" also occurs.
Bitcoin is the best-known example, but cryptocurrencies differ in their technical architecture, the issuance of new units, transaction confirmation, energy consumption, and price stability. For a company, the most important factor is whether a cryptocurrency solves a specific payment or process problem.
Crypto payments only make sense for a business if demand, responsibilities, security, conversion and documentation are clarified in advance.
How does a cryptocurrency work?
Many cryptocurrencies use a blockchain . A blockchain is a distributed transaction ledger whose data records are stored in chronologically ordered blocks and cryptographically linked together. Multiple computers in the network check whether a transaction is valid according to predefined rules.
This technical verification does not necessarily require a central bank. However, this does not mean that every cryptocurrency is completely decentralized. Network rules, software development, trading platforms, and payment services can be centralized to varying degrees.
Bitcoin has its own blockchain and is the associated native cryptocurrency. Transactions are sent to the Bitcoin network, verified, and recorded in blocks. Confirmed transactions cannot normally be reversed by a central authority like a card payment.
Blockchain-based applications are often associated with Web3 . Web3 refers to an internet model based on blockchain, decentralization, smart contracts, and tokens. This article assesses the opportunities and limitations for SMEs and shows... Click to learn more . Web3 is a broader concept and, in addition to cryptocurrencies, includes decentralized applications, digital identities, and digital ownership and usage rights.
Wallet, key and seed phrase
A wallet is software, a device, or a managed service that organizes access to cryptocurrencies. The wallet does not contain the digital assets themselves. The mapping remains stored on the blockchain; the wallet manages the keys or provides access to a service that holds the keys.
Public key and address
The public key is mathematically derived from the private key. Depending on the network, a public address is generated from this. You can share this address so that other people or companies can send you cryptocurrencies.
The public key and wallet address are not always technically identical. In everyday business practice, an address or a QR code generated from it is usually used for payment.
private key
A private key enables the digital signature of a transaction. Whoever controls the private key can usually access the associated crypto assets. Therefore, the private key must never be sent via email or stored in unprotected documents, chats, or cloud notes.
seed phrase
A seed phrase is a sequence of words used to recover the keys of many wallets. Anyone who gains access to the seed phrase can often reconstruct the associated wallet. If the seed phrase is lost along with all other access credentials, recovery may be impossible.
Companies therefore need documented responsibilities, release rules, secure backups, and emergency access. At the same time, the security concept must prevent an easily accessible copy of the seed phrase itself from becoming a risk.
Distinguishing between cryptocurrency, tokens and state-issued money
For an objective classification, you should distinguish between five categories:
- Cryptocurrency: A digital asset that often serves as the native unit of account in a blockchain network. Bitcoin is the most well-known example.
- Token: A digital asset, usually issued via an existing blockchain. A token can, for example, represent access rights, voting rights, or claims.
- Stablecoin: A token whose value is intended to be pegged to an official currency, asset, or basket of assets. This peg can reduce price fluctuations but does not eliminate issuer, reserve, liquidity, or regulatory risks.
- Digital central bank money: Digital money that represents a direct liability of a central bank. Central bank digital money differs from private stablecoins and ordinary bank deposits.
- State money and book money: Euro banknotes and coins are legal tender in the euro area. Banknotes represent liabilities of the Eurosystem; ordinary bank account balances, on the other hand, are book money held by a commercial bank and represent a claim against that bank.
Bitcoin and similar cryptocurrencies are not legal tender or central bank money in the Eurozone . They are neither issued nor guaranteed by the European Central Bank or any national central bank. Businesses may accept Bitcoin voluntarily, but are generally under no obligation to do so.
Stablecoins and the MiCA regulation
The European MiCA regulation distinguishes in particular between asset-linked tokens and e-money tokens . An asset-linked token stabilizes its value in relation to other assets or a basket of assets. An e-money token is linked to a single official currency.
These crypto assets are subject to, among other things, the following requirements:
- Issuers of asset-referenced tokens generally require a branch and authorization in the EU or must be a suitably authorized credit institution.
- Plans include a crypto whitepaper, a separately managed asset reserve, redemption rights, and fixed equity capital.
- E-money tokens may, in principle, only be issued by credit institutions or e-money institutions.
- E-money tokens are legally considered e-money and must generally be issued and repaid at their face value.
- MiCA prohibits interest on asset-linked tokens and e-money tokens.
MiCA has been fully in force since December 30, 2024 ; the regulations for asset-referenced tokens and e-money tokens have been in force since June 30, 2024. The general maximum transition period for already legally operating crypto-asset service providers ended on July 1, 2026, or earlier, with the decision on their authorization.
Member States could shorten or exclude the transitional period. Therefore, the applicable legal jurisdiction must also be checked for a specific provider. This regulatory classification reflects the state of knowledge as of September 2026.
In Italy, the Banca d'Italia and Consob share supervisory responsibilities. The Banca d'Italia is primarily responsible for prudential supervision, financial stability, and payment system oversight. Consob focuses on transparency, conduct of business rules, investor protection, market integrity, and market abuse.
Which authority is responsible for a cryptocurrency service provider depends on the type of provider, the service, and the token. Authorization does not guarantee price stability or protection against losses.
How does a cryptocurrency payment work within a company?
A business cryptocurrency payment can be processed via a company's own wallet or a specialized payment service. The process depends primarily on whether the company holds the received cryptocurrency itself or has it converted directly into euros.
- Set price: The selling price is usually calculated in euros. At the time of payment, the corresponding amount is determined in the accepted cryptocurrency.
- Provide payment details: The wallet or payment service generates an address and often a QR code. The cryptocurrency and network must be uniquely defined.
- Sign the transaction: The buyer authorizes the payment using their private key. The private key itself is not transferred to the company.
- Check confirmation: The transaction is sent to the network. The company determines how many confirmations are required before the delivery of goods or services.
- Set conversion: Depending on the service and internal regulations, the amount is held as cryptocurrency or automatically converted into euros.
- Document the process: The invoice, euro equivalent, time, fees, transaction ID and payment method are recorded in a traceable manner.
- Process refund: A refund is typically processed as a new transaction. The original blockchain transfer is not reversed.
In my work with SMEs, I've observed a recurring pattern: Additional technology only creates value if it simplifies a process or offers a clear economic benefit. A payment method that is rarely used seldom justifies the additional effort required for accounting, training, and security.
Opportunities and risks of cryptocurrencies for SMEs
Possible benefits
- An additional payment option for certain international or tech-savvy target groups.
- Digital transmissions without traditional card infrastructure.
- Traceable transaction identifiers within the respective network.
- Depending on the network, fast data transfer across national borders is possible.
Key risks
- Price fluctuations: The euro value can change between price setting, receipt of payment and conversion.
- Fees: Network, payment service, trading and conversion fees affect the calculation.
- Incorrect transfers: An incorrect address or network can lead to permanent loss.
- Custody: Owning your own keys transfers the responsibility for access and security to the company.
- Lost keys: Without a private key, seed phrase, or a regulated recovery path, access may be permanently lost.
- Fraud risks: Risks include fake wallet software, PhishingPhishing is a fraudulent attempt in which attackers use fake messages, websites, QR codes, or phone calls to steal login credentials, money, or confidential information. For SMEs, this is... Click to learn more, manipulated QR codes, fake support and dubious payment services.
- Operational effort: Responsibilities, training, accounting, refunds and security checks must be integrated into existing processes.
- Legal changes: Regulation, reporting requirements and tax treatment depend on the legal jurisdiction and Business ModelA "business model" essentially describes how a company plans to make money. It's the blueprint for success, showing which products or... Click to learn more .
Checklist for South Tyrolean SMEs
Before you accept cryptocurrencies as a means of payment, you should clarify the following points with accounting, tax advice and, if necessary, legal advice.
Demand and payment process
- Is there a measurable demand from guests, buyers, or business partners?
- Which cryptocurrency and network are accepted?
- Is the selling price definitively stated in euros?
- How long is the displayed exchange rate valid?
- Are incoming payments immediately converted into euros?
- How are confirmations and refunds handled?
- What happens in the event of network outages or delayed confirmations?
Custody, responsibility and documentation
- Does a regulated service handle the processing, or does the company itself keep the items?
- Who is authorized to initiate transactions and who controls them?
- How are the private key and seed phrase protected against loss, theft, and internal misuse?
- How does emergency access work if a responsible person is unavailable?
- How are the invoice amount, exchange rate, fees, and transaction identifier documented?
- What tax, accounting and anti-money laundering requirements apply to the business?
- How are manipulated addresses or QR codes detected and prevented?
My recommendation, based on over 20 years of digital experience: Don't start with the wallet, but with the business benefits. Only then should processes, responsibilities, security, and technology be defined.
This glossary entry is for informational purposes only. It is not investment advice and does not replace individual legal, tax, or financial advice.
Questions and answers about cryptocurrencies
Are cryptocurrencies legal in Italy and the EU?
Dealing with crypto assets is not generally prohibited. However, issuers and crypto service providers are subject to European and national regulations, which is why you should check the provider, the specific service, and the current legal situation if you plan to use them for business purposes.
Is Bitcoin legal tender in the Eurozone?
No, Bitcoin is not legal tender or central bank money in the Eurozone. A business can accept Bitcoin voluntarily, but is under no obligation to do so.
Are payments with cryptocurrencies anonymous?
Many public blockchains are pseudonymous, not anonymous: transactions and addresses are publicly visible, but do not automatically contain a real name. If an address is associated with a person or company, payment transactions can often be traced.
Can a cryptocurrency payment be reversed?
A confirmed blockchain transaction cannot normally be reversed by a bank or card issuer. A refund usually requires a new payment to a previously verified recipient address.
What happens if the private key is lost?
Without a private key or a functioning recovery method, access to the associated crypto assets can be permanently lost. Therefore, companies need secure backups, regulated access rights, and a documented disaster recovery process.
What is the difference between Bitcoin and a token?
Bitcoin is the native cryptocurrency of its own blockchain. A token is typically issued via an existing blockchain and can represent different rights or values.
Is a stablecoin as safe as a euro?
A stablecoin is neither legal tender nor automatically as secure as central bank money. Its stability depends, among other things, on the issuer, its reserves, redemption rights, liquidity, and technical infrastructure.
Does a stablecoin reduce price fluctuations?
A stablecoin can reduce fluctuations against its reference currency if its pegged value is stable. However, this lower volatility does not replace due diligence regarding the issuer, its reserves, and its regulatory status.
Should my company accept cryptocurrencies?
Acceptance can be worthwhile if there is genuine demand and the operational benefits justify the additional effort. Beforehand, check conversion rates, fees, custody, responsibilities, refunds, security, and accounting.
Does a cryptocurrency payment need to be documented for tax purposes?
Business payments must be documented in accordance with applicable invoicing and tax regulations. Record the relevant euro equivalent, date, fees, transaction ID, and payment method, and coordinate the process with your tax advisor.
Is a personal wallet or a payment service better?
A personal wallet offers more control, but transfers the responsibility for keys, security, and emergency access to the company. A payment service can simplify conversion and processing, but incurs fees and creates a dependency on the provider.
Sources
- European Central Bank: What is bitcoin? — ecb.europa.eu (2018, updated 2021)
- Regulation (EU) 2023/1114 on markets in crypto assets — eur-lex.europa.eu (2023)
- EUR-Lex: Summary of the MiCA Regulation — eur-lex.europa.eu (2023)
- Banca d'Italia and Consob: Distribution of responsibilities under MiCAR — bancaditalia.it (2024)
