UK Functional Currency in Crypto-companies

[auditour]

I'm currently dealing with a crypto company which receives/spends substantially in crypto-currencies (BTC/ETH). The question is, what should be the functional currency of these types of companies? As you all know, the definition of functional currency is the currency of the primary economic environment in which the entity operates (in other words, currency which the company receives/spends). Of course, we can't use the cryptocurrency but it's also worth mentioning that almost all cryptocurrencies have active market which is translated in USD. The company used the Sterling as its functional/presentation currency just because it is located in the UK. The way they do it is to translate it in USD then it gets retranslated in GBP. However, i think they may actually use GBP as the functional currency on the premise that majority of the clients are located in the UK, contracts with suppliers are mostly in GBP since its located in UK, banks is in UK, etc....

Any thoughts on this?

 

[kirby]

Just to be sure, the books of the company are kept in which currency?

 

[bklynboy]

My understanding is that crypto currency despite what many think is NOT a currency. Its an intangible asset MTM through earnings. Therefore being paid in this form has no bearing on how you determine your functional currency which is based on the currency you primarily interact with. I suggest you look at where you invest your proceeds (is it US or UK bonds and stocks, what form you pay suppliers or creditors, USD or UK) etc.