KPMG, one of the biggest auditing companies in the world, is taking tentative steps into cryptocurrency. Part of the Big Four, the other three being Deloitte, Ernst & Young, and PricewaterhouseCoopers, KPMG recently published a paper on the benefits of cryptocurrencies. This was a piece done with the help of Coinbase. Is KPMG analyzing Cryptocurrency? We hope so!
KPMG’s paper serves a dual purpose – one for cryptocurrencies and as a whitepaper which outlines the company’s plans to integrate and regulate cryptocurrencies. The paper has several authors, including Kiran Nagaraj, the managing director of KPMG.
Nagraj’s paper “The Case for crypto and institutionalization” discussed the various use cases for Bitcoin. He writes, “Of the more than 2,000 cryptoassets issued or generated, many, including those with lofty valuations, do not even have a functional product associated with them.” He covers other topics in his paper such as products and services, product-market fit, and asked many questions, including:
- Does this token and the product associated with it serve a market need and a natural demand?
- Is this better than existing technologies, assets, financial products, or services?
- Is this product creating a compelling user experience?
- What are the processes and controls for token acquirability, transferability, and redeemability?
Coinbase’s position was posited by Coinbase’s Chief Compliance Officer (CCO), Jeff Horowitz and Vice President of finance (VP), Eric Scro. The two stated that cryptocurrencies have an immense potential to revolutionize the current system. Remarking on the positives of the market, they wrote, “Coinbase believes crypto will mature in three stages: investment/speculation (which the industry is currently in), institutionalization, and utility. The institutionalization and utility phases may happen concurrently. But, to move from investment/speculation to utility, crypto needs to become more liquid, trusted, and accessible.”
From its “whitepaper”, KPMG already has a cryptocurrency-related framework in place. From the paper itself: “KPMG’s framework that has been applied successfully to several advanced crypto projects and businesses. This framework comprises of key capabilities required for a crypto business covering strategy, technology, operations, cybersecurity, risk management, finance and compliance to help them on the road to institutionalization.”
While this is good news given one of the Big Four’s intense interest in an industry currently going through a bear run, the natural question that should follow is: will governments start to show an equal level of interest? If so, what then?
What do you think? We know Bakkt is coming up in December. We also know that Morgan Stanley considers Bitcoin to be an asset class. We’ve got a bunch of good news coming up. What do you plan on doing? Let us know on our Facebook page!
