Fritz Charles

KPMG: Cryptoassets Are a Big Deal

This report, created in collaboration with Coinbase, Fundstrat Global Advisors, and Morgan Creek Digital, provides an overview of the crypto market and identifies the key challenges to the adoption of crypto in the global financial services ecosystem.

Check out the 42 page report here.

If you pressed for time, not to worry. Here are the highlights from the report.

Cryptoassets are a big deal.

KPMG opens the report reinforcing that cryptoassets are worth paying attention to and are impossible to ignore.

Examples of crypto use cases

  • Bitcoin: Has the potential to become a store of value that is natively digital and an alternative to traditional asset classes.

  • Ethereum:  Has enabled Initial Coin Offerings (ICOs) as a means of raising capital.

  • Litecoin: Has been used to transfer the $99 million for less than $1 in transaction fees. Represents a significant improvement compared to the speed and accessibility of existing cross-border payment rails.

  • Tokenization: Tokenization of traditional assets could also help increase liquidity, codify rules and regulations, and increase transparency.

Creating an Open Financial System and why Institutionalization is key

  • The current financial system is not open, and access to financial services is not guaranteed everywhere.

  • The current payments system has a lot of inefficiencies that make moving money around the world difficult.

  • Coinbase believes that crypto will mature in three stages:

    • Investment/Speculation (which the industry is currently in)

    • Institutionalization

    • Utility

  • Crypto is unique in that it began with retail investors, not institutional investors.

  • To encourage adoption, Coinbase is building institutional infrastructure.

  • Regulatory agencies are also beginning to seriously discuss cryptoassets.

KPMG’s Cryptoasset Framework

  • Plan

  • Onboard

  • Service and deliver

  • Protect

  • Comply and report

Conclusion

Cryptocurrency is a remarkable and innovative leap forward, but the leap is not far enough yet to meet all the criteria for a true currency.

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