Beyond the headlines about this billionaire personally owning cryptocurrency or that company accepting it as payment, there is a fundamental truth about cryptocurrency that we as accounting professionals should start to accept.
Cryptocurrency is here to stay.
Today, I took a look at some numbers. and learned that I'm apparently late to the game. It is a big game and Bitcoin isn't the only player. The cryptocurrency global market cap is at 1.32 trillion dollars, an increase of 2.87% over yesterday. And there are 5,763 different cryptocurrencies listed!
Although you may think that none of your clients own cryptocurrency, there is a possibility they do or will. Cryptocurrency trading and investing is growing. In fact, JP Morgan today became the first major bank to provide all of their wealth management clients access to cryptocurrency investments through Grayscale’s Bitcoin Trust, Bitcoin Cash Trust, Ethereum Trust, Ethereum Classic products, and Osprey Funds’ Bitcoin Trust.
Currently, there is not a regulatory body that oversees cryptocurrency transactions. However, both SEC and banking leadership are indicating that there should be new regulations for the cryptocurrency market. SEC Chairman Gary Gensler testified in May before the House of Representatives, stating that the cryptocurrency market could benefit from “greater investor protection” under the SEC's existing rules. In addition, the Basel Committee for Banking Supervision, which sets global standards for banking regulation, proposed a rule requiring banks holding cryptocurrency assets to set aside a dollar in capital for every dollar of cryptocurrency owned.
Another body that has not provided much guidance on cryptocurrency is the Financial Accounting Standards Board (FASB). Last month, however, FASB did launch an agenda consultation to determine public view on the board's long-term priorities. Responses are not due until September 22nd and the board will not review the responses until early next year.
This leaves accounting professionals like you to rely on the AICPA's non-binding practice aid "Accounting and auditing of digital assets". And it also leaves you with a need to continue learning about cryptocurrency.