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ACCA Strategic Professional · Strategic Business Leader · Enabling success: disruptive technologies

Tessaro Retail, a listed company, wants to accept a cryptocurrency for online sales. The finance director is concerned about the strategic and governance implications. Which concern is most directly linked to the nature of cryptocurrencies?

The main concern is price volatility combined with regulatory uncertainty. Cryptocurrencies are not guaranteed by central banks, values can swing sharply, and rules on tax and money laundering differ, so accepting them creates financial and compliance risks that the board must govern.

  1. APrice volatility and regulatory uncertainty, which expose the company to exchange-rate style losses and possible compliance and money-laundering issuesCorrect
  2. BCryptocurrencies are issued and guaranteed by the central bank, so they carry no risk
  3. CCryptocurrency payments can always be reversed by the bank if a customer disputes them
  4. DAccepting cryptocurrency removes the need for any record-keeping or internal control

Explanation

Cryptocurrencies are typically not backed by a central bank, can fluctuate sharply in value, and regulation varies, creating financial, compliance and anti-money-laundering risk. Transactions are generally irreversible, and internal controls remain necessary, so the other options are wrong.

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