The case for holding several currencies is usually made in terms of convenience. The real argument is arithmetic, and it is worth doing before deciding.
The double conversion
A business invoices customers in USD and pays some suppliers in USD. It holds a single EUR balance.
A $50,000 receipt is converted to EUR on arrival. A $30,000 supplier payment is converted back from EUR a fortnight later. The same dollars have crossed the spread twice, and nothing about the business required either conversion.
At a 1.4% spread that is roughly €600 on a round trip that never needed to happen. Repeat monthly and it is real money spent on an operational default rather than a decision.
Holding the currency removes the round trip entirely. Money arrives in USD, sits in USD, leaves in USD. You convert only the genuine surplus, when you choose to, at a rate you can shop for.
When it is worth it
You invoice and pay in the same foreign currency. The clearest case. Every matched pair is a conversion avoided.
Your revenue currencies differ from your cost currencies. Holding both lets you time conversions instead of taking whatever rate applies on the day a payment happens to land.
Customers prefer to pay in their own currency. Payers who can send in their own currency to local-format details tend to pay faster and query less. The conversion decision moves to you, which is where you can manage it.
You are exposed to a currency between quote and payment. Quoting in USD in January and being paid in April means carrying three months of currency risk. It does not remove the risk, but it lets you decide when to realise it.
When it is not
You genuinely operate in one currency. If revenue and costs are both euro, a single euro bank account does the job and extra balances are just more accounts to reconcile.
Your volumes are small. A spread saving on €40,000 a year does not pay for the added reconciliation work.
You would leave idle balances scattered. Cash spread across four currencies that nobody sweeps is worse than one balance somebody watches.
Doing the calculation
- List every currency you invoice in, with annual volume.
- List every currency you pay out in, with annual volume.
- For each currency, the overlap — the smaller of the two — is the amount currently being converted twice for no reason.
- Multiply the overlap by twice your spread. That is the annual saving from holding that currency.
- Compare with the cost of the arrangement.
Most businesses that do this find one or two currencies clearly worth holding and the rest clearly not. That is a better answer than "all of them", which is what the convenience framing tends to produce.
Reconciliation, which is the real work
Multiple currencies means multiple ledgers, and the practical questions are accounting ones:
Which rate, when? Fix a policy — transaction-date rate, month-end revaluation — and apply it consistently. Auditors care more about consistency than about which defensible policy you chose.
Unrealised versus realised. A held foreign balance moves in value with the rate. Those movements hit your accounts whether or not you have converted anything.
Matching receipts. Multiple currencies multiply the ways an unreferenced payment can go unmatched. The reference discipline matters more here, not less.
Local details versus a single set
There is a difference between holding a currency and being able to receive it the way local payers expect. A payer sending EUR to details in a format they do not recognise sometimes routes it internationally instead, adding cost and delay for both sides.
Ask what account details come with each currency, and whether they are dedicated to you or references within a pooled structure — a virtual IBAN does not necessarily constitute a separate bank account, and the difference affects both reconciliation and what your auditor will ask.
How this works with 2PayApp
A 2PayApp business payment account can hold and settle EUR, GBP and USD, with access to payment rails including SEPA, SEPA Instant, Faster Payments, SWIFT and ACH. A dedicated GB IBAN may be available depending on eligibility, compliance approval and the approved account configuration. Current fees are on the pricing page.
2PAYAPP LIMITED is registered with FINTRAC as a Canadian Money Services Business. FINTRAC registration is a legal registration requirement; it is not a banking licence and does not constitute an endorsement by FINTRAC. 2PayApp is not a bank. Accounts, currencies, payment rails, account details, virtual IBANs and transaction limits are subject to onboarding, compliance approval, provider availability and the customer's approved account configuration.
FAQ
How many currencies should I hold? The ones where you both receive and pay. The overlap calculation above answers it for your numbers.
Does holding a currency remove currency risk? No. It removes forced conversion and lets you choose the timing. The exposure on the held balance remains.
Can I receive a currency without holding it? Usually, but it is converted on arrival — which is the double conversion this article is about.