KPMG Accounting Firm reports issues with cryptocurrencies in a report! What will happen to the future of cryptocurrency?
One of the world's Big Four accounting firms, KPMG, announced a report that has become a topic as an anti-thesis to the series of Bitcoin Cash hard fork controversies (Note 1).
KPMG points out the problems facing cryptocurrency in the report
KPMG (headquartered in the Netherlands) is a world-renowned accounting firm, often described as part of the BIG4.
The report released by KPMG is titled “Regulation of Crypto Assets” and summarizes “reasons for slow adoption” and “obstacles that cryptocurrencies must overcome.”
KPMG states that the reason for the slow spread of cryptocurrencies is the investors’ lack of trust and credibility.
Furthermore, to ensure “trust and credibility,” KPMG highlights two concrete issues as examples that need improvement:
- High volatility (Note 2)
- Scalability problems (Note 3)
Volatility refers to price fluctuations in cryptocurrencies; “high volatility” means price changes are sharp, as with Bitcoin.
A currency with high volatility carries the upside of rapid price increases, but also the risk that the held currency may drop significantly in a short period.
Therefore, currencies with high volatility are less likely to be adopted for everyday usage.
Scalability problems arise when the amount of information that can be written per block on the blockchain is small, causing rising fees and delays in transaction settlement.
Scalability issues are specific to cryptocurrencies; there is no scalability problem for fiat currencies like the Japanese yen or the US dollar.
In other words, unless the two issues above are resolved, cryptocurrency development is unlikely, according to KPMG.
Barriers that cryptocurrencies must overcome, as identified by KPMG
In KPMG’s report, six barriers that cryptocurrencies must overcome are highlighted.
- Compliance with rights and obligations
- Customer and asset provenance (KYC)
- Cybersecurity and asset protection
- Accounting and financial reporting
- Tax implications
- Fork management and governance
Source:
KPMG’s outlook on the future of cryptocurrency
Head of KPMG’s Crypto Assets Services division, .......Continue here ⇩
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