Blockchain updates and what it means for CPAs

Posted on Tuesday, March 26, 2019 by User Not Found

By Rebecca Kerr, OSCPA communications intern

In a recent Accounting Today article, “5 blockchain trends CPAs need to know,” writer Girish Ramachandra outlines the latest and greatest of blockchain and its relevance to the accounting world. She highlighted five prominent trends:

- Regulatory framework
- Tokenization of assets and securities
- Cryptocurrencies are perhaps here to stay – in some form or the other!
- New business models
- Industry adoption of blockchain is on the rise

In terms of regulatory framework, Ramachandra wrote, “the regulators in the U.S. are approaching blockchain technology with what they like to call a ‘light touch regulatory framework’.” She noted how the SEC and CFTC are making themselves available for innovators and lawmakers in the field to help out with the process itself while also working on the development of the framework.

The tokenization of assets and securities with blockchain is a new and growing phenomenon within the accounting sector. “Mechanisms such as Initial Coin Offerings and Security Token Offerings are innovations enabled by the blockchain technology,” said Ramachandra. This particular function of blockchain is estimated to bring in trillions of dollars toward the economy.

Ramachandra said JPM Coin is a good model for how businesses should use blockchain. She said, “more financial institutions are joining the party and eventually coming together for interoperable settlement tokens.” She believes cryptocurrencies are, indeed, here to stay as they are able to serve as an alternative to the international money transfer process.

New business models are bound to arise as a result of blockchain as well. It is believed that it will completely alter the current model, as the digital transfer of value and assets is projected to become the new standard. Ramachandra said, “there are currently public-private partnerships in the works across many states in the U.S. to explore the viability of technology in the areas of transferring car titles and property titles.”

Ramachandra points out many industries have already undergone the adoption of blockchain and securities – and more industries will follow suit. “Accountants will need to understand how the info is tracked and how the value is transferred on blockchain. It’s very likely that existing accounting and ERP products will start integrating blockchain technology,” she predicted.

What do you think of these blockchain trends? Are they here to stay? Let us know in the comments below.

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