TECHNOLOGY
The Latest Trends in Blockchain and Crypto BY DR. SEAN STEIN SMITH, CPA, CITY UNIVERSITY OF NEW YORK — LEHMAN COLLEGE
Specific questions to ask include the following: y What crypto wallet (storage) applications are being considered and potentially implemented by the organization? y Has the insurance for the organization been updated or modified to account for the potential risk of hacks or other cybersecurity issues linked to blockchain and cryptoassets? STABLECOINS Can the profession successfully navigate the potential complications that can, and do, arise from cryptoasset accounting for instruments such a stablecoins? Some additional issues that stablecoins create include the following:
The blockchain and cryptoasset landscape continues to accelerate and evolve in ways that just a short time ago would have seemed radical or outlandish. Below are some recent developments and what they might mean for practitioners moving forward. CRYPTO PAYMENTS ARE HERE Following the clarifications by the Office of the Comptroller of the Currency (OCC) allowing federally chartered banking institutions to buy, sell and approve certain crypto transactions, the trend is clear. In addition to these announcements, multiple banking charters have been granted to digital asset institutions. The takeaway is that clients will be dealing with crypto payment issues, and CPAs need to know what to ask, how to ask and how to interpret the answers received. Other issues include the following: y Specific industries, such as the stillnascent cannabis industry, can benefit
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SUMMER 2021 | NEW JERSEY CPA
dramatically from the integration and implementation of blockchain and crypto asset solutions, as documented in the article on page 17 of this publication. y Cost savings and other operational opportunities regarding near-real-time reporting and reducing the need for manual confirmations are going to increasingly move from concept to reality; are practitioners prepared for these adjustments? NEW ITERATIONS OF CRYPTO ARE HERE Stablecoins, digital twins connected to blockchain and the potential rise of the nonfungible token (NFT) sector all represent new iterations of blockchain that need to be understood, assessed and integrated into business operations. Depending on the client, an increasing percentage of assets, revenues and operations might be taking place in a purely digital or even crypto environment.
y From a practitioner perspective, what are the broader implications of clients, both now and in the future, beginning to accept crypto payments as an integrated part of business operations? y From a cybersecurity standpoint, are clients and practitioners going to be up to speed with regard to dealing with an increasing amount of digital payments? ACCOUNTING OPEN ITEMS There are still a significant number of accounting-related open items that need to be addressed in order to generate wider adoption and utilization, including the following: y Are clients aware of tax obligations related to crypto? y Do clients properly disclose cryptorelated information to regulators, most notably the IRS, in the correct manner? y Is there a process in place at the organization to correctly value and report updated values of crypto holdings as they change?
