Blockchain and crypto payments are rapidly proliferating, and it would be tempting to think that many of the unresolved issues surrounding them have been resolved. But even as cryptocurrency and cryptoassets have become increasingly integrated into mainstream financial markets, there are several implications that management accountants need to keep in mind. While every organization operates differently, the significant trends and developments in the cryptoasset sector also present key takeaways for accounting professionals.   When crypto payments began occurring, being offered by major payment processors and accepted by large organizations the world over, it took the profession by storm. Over the last several years and mirroring the rise and expansion of stablecoins for payment purposes, crypto payments have almost become routine.  


  With a 500% increase in stablecoin transactions from 2020 to 2021 (President’s Working Group on Financial Markets, Report on Stablecoins, November 2021, and with virtually every major financial institution offering some type of blockchain and cryptoasset services, novelty headlines connected to these stories have dropped off.   While crypto payments might draw the most attention, the conversations around cybersecurity controls are where management accountants should focus their attention. For example, just a few of the questions and associated controls that need to be addressed are (1) how will cryptoassets accepted for payments be held or converted, (2) what processes are in place to safeguard which members of the company have access to these cryptoassets, and (3) will these cryptoassets be able to interoperate with the other payment technologies in place at the company?  


  An additional trend that management accountants should keep an eye on is that enabling and facilitating crypto payments isn’t a one-size-fits-all approach. Two fundamental questions should be asked by organizations and the management accounting team:  
  1. Will the organization bring cryptocurrency onto the balance sheet or deploy a third-party vendor to handle the technical aspects of these payments?
  2. Is this third party merely serving as a payment portal, or is the vendor offering custodial services over these assets?
  If a third-party vendor is utilized, the cryptoasset payments could be a hands-off issue, but the compliance and reporting around crypto payments and services will still fall on the organization facilitating these payments. Namely there are several factors that management accountants will need to address while working with the rest of the organizational team. These include, but aren’t limited to:  
  1. Conducting due diligence on the customer experience and reviews of this third party by other market actors;
  2. Reviewing the systems and controls implemented by the partner organization, ideally through reviewing a service organization control report; and
  3. Confirming that the settlement of cryptoasset transactions is occurring at the advertised prices.


  Over several years, the development of central bank digital currencies (CBDCs) has turned from a novel concept to a real-world asset class launched in several countries. CBDCs are cryptoassets that are issued, backed, and supported by a nation-state, which should lead to higher confidence in the instrument and lower volatility overall. Notably, the Chinese e-CNY was used by more than 150 million individuals during 2020 and continues to become integrated into payment applications by individuals and organizations within the country. The e-CNY might be the highest profile example, but several other nations are planning launches of CBDCs during 2022.

Outside of the other crypto-related implications of these payments, there are several effects of CBDCs unique to these assets becoming further integrated into payment processes. Compensating bank balances—and other such arrangements—will become less necessary as more transactions are completed using tools that are verifiable on an almost instantaneous basis. Additionally, the management of accounts receivable and payable will be altered on a permanent basis, as any remaining “float” is eliminated. Finally, the expectation of on-demand and instant payments will become the norm.

Blockchain and cryptoassets represent a global industry, with no one jurisdiction exercising universal leadership over the developments in the space. That said, there are three major economic blocs/regions/countries that have tended to lead most of the comprehensive debates: China, European Union, and the United States. Many management accountants work with organizations that are either headquartered in these jurisdictions or conduct business in these areas, so let’s take a look at how these crypto payment ecosystems are developing.

China has taken the most aggressive stance on cryptocurrencies, with numerous bans, along with crypto trading, payments, mining, and other activities. Simultaneously, the government has actively pursued and implemented the utilization of its CBDC. The EU, despite having several member nations that are decidedly pro-crypto, has yet to issue a unified policy on how cryptoasset payments are to be treated. Reflecting the somewhat decentralized tax and other governance that drives most EU decision making, practitioners need to be aware of the individual laws and policies that surround how cryptoassets are treated and reported to the marketplace. In the U.S., a murky accounting environment remains at best in regard to cryptoassets and crypto payments. Although stablecoins continue to increase in market capitalization and number of transactions processed, this uncertainty will continue to serve as a significant obstacle to broader adoption.

Regardless of which geographic area is examined, the fact pattern is objectively true. Crypto payments, and specifically stablecoins, are continuing to increase the option of a blockchain-based financial system. Cryptoassets and crypto payments continue to evolve and develop at an accelerating rate, but even with this development there are still substantial obstacles that practitioners and organizations will need to overcome. Management accountants, already dealing with an array of major changes from an operations and payment perspective, will need to evolve and keep pace with these changes. Evolving and adapting to these changes might be difficult but aren’t impossible, and proactive practitioners will be the ones best positioned to leverage these opportunities moving forward.  

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