KPMG tells clients ‘crypto can’t be ignored’

2096
KPMG crypto

Global auditing and professional services giant, KPMG, lists Citigroup, Deutsche Bank, Wells Fargo, PepsiCo and General Electric among its top clients – they’ve now all been advised not to ignore cryptoassets.

In a paper titled ‘institutionalisation of crypto assets’ KPMG has outlined how it believes cryptoassets will eventually reach their full potential and how its clients can ride the wave.

“Cryptoassets are now impossible to ignore,” the paper states.

“In 2018, we are seeing a wave of new entrants in the market such as security token platforms, stablecoins, and even established financial services institutions that are launching crypto products and services.”

KPMG crypto
KPMG’s clients are some of the world’s biggest corporations. KPMG is known as one of the ‘Big Four’ auditors, along with Deloitte, Ernst & Young, and PricewaterhouseCoopers.

The ‘big 4’ auditor believes the next stage of explosive growth in cryptocurrencies will come on the back of institutionalisation.

“There are real problems in the global financial services ecosystem that cryptoassets are looking to address.

“More participation from the broader financial services ecosystem, will help drive trust and scale for the tokenized economy and help the crypto market grow and mature.

“Institutionalization is the necessary next step for crypto and is required to build trust, facilitate scale, increase accessibility, and drive growth.”

Steps towards institutionalisation

KPMG list 6 challenges facing crypto institutionalisation.

  • Compliance with regulatory obligations.
  • Fork management and governance.
  • KYC and cryptoasset provenance.
  • Securing cryptoassets.
  • Accounting and financial reporting.
  • Tax implications.

Despite widespread commentary regarding volatility concerns, it isn’t something KPMG believes is a major issue.

“While volatility is certainly a problem, it is important to recognise that these assets are still fairly immature and will become less volatile as they mature.”

KPMG offers a broad range of consulting services aimed to help its high-profile clients address the challenges and adopt crypto and blockchain technology.

The paper warns clients could be left behind if they don’t update their business models.

“A new world of finance is emerging in which transacting in cryptoassets may become standard procedure.

“New tokens and assets are one thing, but new business models and market participants may redefine the space significantly over the next few years.

“We are watching crypto evolve from the front lines and will continue to update our thinking, our framework, and our services.”