There are also other options such as various OTC trading desks or Gemini's daily auctions. And finally, there are several other full-service payment processors that they could try besides Coinbase.
Coinbase was a really bad pick for them. It's almost certainly the single least likely option to be able to support fringe businesses, due to their close relationship with banks and credit card companies.
You only need to cash out the amount you can't spend in bitcoins. The more things you can buy in bitcoins, the less powerful politically-controlled money becomes.
Can't they just pay boringCorp Ltd. in Bitcoin for use of their "bussiness solution" (that is managing your infrastructure or providing the bitcoin transaction platform). The boringCorp Ltd can cash out for ActualMoney(tm) and I'm sure there is some way of accounting to get that money back to where it needs to go.
It's not money laundering to rearrange your payment structure to avoid currency conversions. If half your customers pay you in Yen and half your customers pay you in dollars, it's not a crime to use the Yen directly to pay your Japanese expenses.
Same goes with bitcoin - if you can find a server company that accepts your bitcoin - you're under no obligation to only buy things using dollars, assuming you are properly reporting your transactions.
There are also other options such as various OTC trading desks or Gemini's daily auctions. And finally, there are several other full-service payment processors that they could try besides Coinbase.
Coinbase was a really bad pick for them. It's almost certainly the single least likely option to be able to support fringe businesses, due to their close relationship with banks and credit card companies.