After a disastrous year for crypto, it might come as a surprise to accounting professionals that crypto adoption and blockchain implementation have continued virtually unabated. This is even taking into account the collapse of FTX, which exposed the company thought to be a model of good governance and management as a fraudulent enterprise. These scandals are just one small piece of the much larger blockchain and crypto asset story.


Be it the continued development of the Onyx blockchain by J.P. Morgan or the numerous other projects launched by Adobe, Allianz, Fidelity, Fujitsu, and others listed on the Forbes Blockchain 50 list, the blockchain and crypto space seems to be bifurcating. On the one hand, there are speculative investments and loosely regulated companies, like the aforementioned FTX. On the other, relatively staid projects are being developed and implemented by some of the largest and most successful companies in the world.


Accounting professionals are trusted with access to highly confidential, highly valuable, and highly sensitive information in virtually every company across nearly every industry, so the profession absolutely needs to contend with implications for continued blockchain adoption moving forward. Let’s take a look at a few items that management teams and management accountants need to discuss, analyze, and stress-test with regard to blockchain implementation.




One of the most important aspects of a blockchain implementation, or any technology project for that matter, is how the specific tool in question is being developed. Related questions that have a direct impact on the control environment, and by extension the accounting function, include the following:


  • Is the blockchain itself being developed in-house, or is the company joining an existing enterprise option? 
  • If developed internally, what is the vetting process to determine the technical and industry expertise of both the company and the team assigned to the development engagement?
  • What will the scope of the blockchain implementation be, i.e., just financial information or other types of data?
  • Are industry regulations around consumer privacy and the like being incorporated into the design and testing of the proposed blockchain?




As with any other technology solution, a company that’s implementing blockchain technology or joining an enterprise blockchain network must also have the appropriate processes in place to ensure continued access in the event of personnel change, entity changes, or other structural changes to the business. This consideration builds directly on the first point raised and should be discussed openly as a part of the development and implementation process. The following considerations should be factored into this analysis:


  • Which management team members have access to the underlying blockchain code?
  • How is this access monitored and controlled?
  • Does the company have a plan in place to update this access list if necessary?
  • How is the succession plan of access documented and reviewed?
  • Has all of this been analyzed by legal and risk management professionals?




While this seems simple on the surface, determining if the blockchain is financial or nonfinancial is imperative from a cybersecurity and implementation perspective. Financial blockchains, almost by default, create a bevy of cybersecurity concerns related to private key management; correctly reporting valuations and price volatility; and contending with the confusion that still abounds regarding the reporting, disclosure, and tax implications of crypto assets.


A nonfinancial blockchain generates its own unique cyber considerations. For example, how are the privacy rights of individuals squared with the immutable nature of virtually all blockchain records? Additionally, the prospect of multiple entities sharing information, even if on a private or enterprise blockchain, can cause regulators and insurance carriers to reassess the risk profile of the companies involved. These considerations also provide a quantifiable opportunity for management accounting professionals to play a leading role in the more strategic debates and discussions around blockchain implementation and its effects.




Internal controls and cybersecurity policies are going to have to be updated as a result of blockchain implementation at any organization. Even though blockchain has several fundamental traits that appeal to the business community—immutability being among the most commonly discussed—this doesn’t mean that organizations can place controls and cybersecurity as a lower priority after blockchain adoption.


Notably, the majority of hacks and breaches that have occurred in the blockchain sector, or via blockchain-based applications, haven’t been a result of failures of the technology. Rather, these failures and breaches have been, almost universally, the result of issues around how the data is imported, exported, or otherwise accessed and analyzed from the underlying blockchain. 


Blockchain and crypto assets had a volatile 2022, with the failure of numerous organizations, large declines in prices, and a general souring of sentiment for the sector at large. That said, the adoption of blockchain-based applications and tools continues to accelerate, with almost every large institution (and many countries, according to the Central Bank Digital Currency Tracker, actively researching, investing, and implementing these solutions. 


As with any new technology or technology system, accounting, control, and cybersecurity considerations need to be addressed before, during, and after the technology has been implemented. Issues like this present obstacles for management accountants and companies alike, but also create opportunities for motivated and proactive practitioners seeking to continuously elevate themselves and the management accounting function. Blockchain is here to stay and will create many more opportunities for accounting professionals than it will ever eliminate (see “Understanding Blockchain”); management accountants should take note. 

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