Given the Trump administration's support for blockchain, some companies have recently been paying more attention to the controversial technology. Investing in cryptocurrencies and blockchain may have its benefits, but you should think carefully about whether it's right for your business.
says Felix Xu, CEO and co-founder of ARPA Network and Bella Protocol. ARPA Network and Bella Protocol are two blockchain projects ranked in the world's top 500 by market capitalization and backed by major investors such as Binance Labs and Arrington Capital.
Xu, who studied finance and information systems at New York University's Stern School of Business, combines expertise in cryptography, decentralized finance, and artificial intelligence. He is a partner at crypto hedge fund ZX Squared, an active NFT collector, and deeply involved in advancing efforts at the intersection of crypto, decentralized infrastructure, and verifiable AI.
CFO Leadership spoke with Xu about how finance leaders can best assess whether such solutions will work for their companies.
Why should or should companies invest in cryptocurrency and blockchain solutions?
Businesses may invest in cryptocurrencies and blockchain to increase transparency, security, and efficiency, especially in areas involving payments, supply chain tracking, or contracts. Blockchain reduces operational friction, reduces intermediary costs, and creates new revenue streams through tokenization and digital assets.
However, businesses should continue to exercise caution due to regulatory uncertainty, volatile cryptocurrency markets, and potentially higher implementation costs and technical complexity. Companies should carefully evaluate the strategic fit and true ROI of blockchain, rather than investing just because it is trending.
Do you see any changes in the industry regarding the use of cryptocurrencies and investment technology by small and medium-sized businesses?
We are witnessing remarkable changes. Small and medium-sized enterprises are increasingly adopting the tools of cryptocurrencies and blockchain, not only for payments, but also for managing funding and liquidity through tokenized assets and DeFi platforms.
For example, small and medium-sized enterprises previously excluded from traditional financing methods can now access global liquidity pools through decentralized crowdfunding and token issuance. However, the pace of adoption will depend on factors such as local regulatory clarity, sector-specific needs, and familiarity with blockchain's underlying technology.
How can finance executives looking to push the envelope take advantage of digital tools like AI powered by blockchain?
CFOs looking to provide strategic leadership must leverage AI not only to improve efficiency but also to support powerful decision-making. For example, AI-powered predictive analytics can help CFOs proactively manage risk, optimize working capital, and predict market changes with unprecedented accuracy. Advanced AI tools integrated with blockchain will further enhance the reliability and security of critical data in areas such as audit and compliance, enabling CFOs to deliver greater strategic value and organizational resilience.
For example, CFOs in this space can leverage AI-driven predictive analytics to predict liquidity events, predict token volatility, and proactively manage financial risk using tools like Chainaracy and Nansen that integrate real-time blockchain analytics and machine learning. Such platforms allow financial leaders to closely monitor transaction flows, predict potential exposures in DeFi lending protocols, and dynamically optimize financial allocation.
Furthermore, the combination of advanced AI predictions and blockchain provides an immutable and traceable record of all financial interactions, increasing data reliability, a key benefit in audit scenarios. This integration significantly reduces manual audit efforts, ensures regulatory compliance, and increases transparency with stakeholders.
Ultimately, the secure, decentralized nature of blockchain combined with the predictive capabilities of AI will enable CFOs to confidently manage risk, optimize capital efficiency, and deliver greater strategic value and resiliency to their organizations.
What value do digital assets have for growing businesses?
Digital assets offer growing companies a path to increased liquidity, alternative financing mechanisms, and competitive differentiation. By tokenizing assets such as stocks, real estate, and intellectual property, companies unlock new sources of capital, simplify the transfer of ownership, and enhance market access and liquidity.
Additionally, integrating digital assets positions companies as innovators and resonates positively with digitally savvy customers and forward-thinking investors. However, close attention to regulatory compliance, robust storage solutions, and proper risk management remains essential to maximize long-term value and security.
