Moore Together: Assured Disruption - Cryptocurrency and Digital Assets

MOORE-Together_NEW-Moore-Brand.jpgWith the Cayman Islands being home to an estimated 70% of the world’s investment funds – which now include cryptocurrency funds – Moore Cayman identified the opportunity to be a local market leader in auditing digital asset holdings at an early stage.

There are now over 2,400 cryptocurrencies, and an increasing number of tokenized assets that promise more secure (via cryptography and blockchain technology), transparent (for the owner), rapid (no banks), with increasingly global market access, and very low transaction costs.

New markets for digital asset derivatives, lending, and deposit rehypothecation are all developing too and could conceivable expand to digital representations of most types of fiat currency (stablecoins) and investment class (tokenized securities), plus utility tokens with specific use-cases.

Some of the largest global enterprises have jumped on the digital currency bandwagon. In particular, Facebook is seeking regulatory approval to launch Libra as a stablecoin to transfer value between users of its applications (potentially Facebook, Whatsapp and Instagram) with a consortium of other businesses.

China has announced that it has a central bank digital currency ready for launch and an increasing number of countries are looking at central bank digital currencies too.

It will be interesting to see if incumbent service providers like FedNow evolve as they plan to stay relevant by working towards a real-time payment and settlement system for banks in the future.

Digital currencies and digital assets are innovating at such a pace that some projects like Libra are currently trapped by inconsistent and slow regulatory responses from key financial regulators around the world. In addition to regulatory risks, tax, accounting and audit rules have not kept up and many areas of best practice are evolving whilst incumbent standard setters take a wait and see approach.

Moore Cayman, in partnering with other network firms, can service all types of client in the digital asset space.

With 20 audit clients in the digital asset space already, our early investment in the learning curve has been highly beneficial.

Let’s evolve and grow.

Contributed by David Walker with Moore Cayman (david.walker@moore.ky)