Pillar Guide

Crypto Treasury Management: Best Practices

Master crypto treasury management including base currency selection, FX strategies, stablecoin accounting, and ECB rates for EU compliance.

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Crypto Treasury Management: Best Practices

Effective treasury management is critical for any crypto-native business. This guide covers key principles for managing cryptocurrency treasuries.

Choosing a Base Currency

What Is Base Currency?

Your base currency (functional currency) is the primary currency for:

  • Financial reporting
  • Performance measurement
  • Internal accounting

Options

Fiat Base Currency:

  • EUR, USD, GBP, CHF
  • Traditional approach
  • Easy regulatory compliance
  • Clear tax reporting

Crypto Base Currency:

  • BTC for Bitcoin-focused entities
  • ETH for DeFi protocols
  • Novel but gaining acceptance

Decision Factors

Consider:

  • Regulatory jurisdiction
  • Primary revenue currency
  • Stakeholder expectations
  • Auditor acceptance

→ Read more: Base Currency Selection Guide

FX Conversion Strategies

Rate Sources

For fiat conversion:

  • ECB official rates (EU compliance)
  • Bloomberg/Reuters (enterprise)
  • Open Exchange Rates (general)

For crypto pricing:

  • CoinGecko
  • CoinMarketCap
  • Direct exchange rates

Conversion Timing

Options:

  • Point-in-time rates
  • Daily average rates
  • Weighted average rates

EU Compliance

For EU-regulated entities:

  • ECB rates preferred
  • Documentary evidence
  • Consistent methodology

→ Read more: ECB Rates Guide

Stablecoin Management

Types of Stablecoins

Fiat-Backed:

  • USDC, USDT, BUSD
  • Backed by fiat reserves
  • Audited (varies)

Crypto-Backed:

  • DAI
  • Over-collateralized
  • Decentralized

Algorithmic:

  • Various mechanisms
  • Higher risk profile

Accounting Treatment

Key decisions:

  • Peg assumption (1:1)
  • When to use market rates
  • Depeg event handling

Risk Management

Monitor:

  • Issuer risk
  • Depeg risk
  • Regulatory risk
  • Liquidity risk

→ Read more: Stablecoin Accounting

Treasury Diversification

Asset Allocation

Consider holding:

  • Major cryptocurrencies (BTC, ETH)
  • Stablecoins for operations
  • Native tokens (if protocol)
  • Yield-generating positions

Risk Framework

Balance:

  • Liquidity needs
  • Volatility tolerance
  • Yield opportunities
  • Operational requirements

Rebalancing

Establish:

  • Target allocations
  • Rebalancing triggers
  • Execution procedures
  • Documentation

Yield Management

Treasury Yield Options

  • DeFi lending protocols
  • Staking rewards
  • LP positions
  • CeFi yield products

Risk Considerations

  • Smart contract risk
  • Protocol risk
  • Counterparty risk
  • Liquidity risk

Accounting Implications

  • Revenue recognition
  • Risk documentation
  • Auditor acceptance

Operational Treasury

Cash Management

  • Operating runway calculations
  • Payment scheduling
  • Currency requirements
  • Buffer maintenance

Payment Operations

  • Vendor payments
  • Payroll (crypto or fiat)
  • Tax payments
  • Grant disbursements

Banking Integration

  • Fiat on/off ramps
  • Bank account management
  • Wire processing
  • Reconciliation

Reporting

Internal Reporting

  • Daily treasury dashboard
  • Weekly position reports
  • Monthly performance
  • Quarterly strategy review

External Reporting

  • Financial statements
  • Investor reports
  • Regulatory filings
  • Audit support

KPIs to Track

  • Runway in months
  • Allocation vs. target
  • Yield performance
  • FX impact

Tools for Treasury

Essential capabilities:

  • Multi-wallet aggregation
  • Real-time valuations
  • FX rate management
  • Automated reporting

Coincile provides universal base currency support including BTC and ETH accounting.