Are CPA’s Critical to the Future “Internet of Value”?
Most people in the blockchain/cryptocurrency space already know that the current “internet of information” will become the “internet of value.” However, most people, especially CPA’s, have not begun to understand the revolutionary impact this will have on accounting. As a result, people are underestimating the impact that CPA’s will have on the future of the internet…
When I explain triple entry accounting to students at career fairs, their entire body language changes. They are immediately engaged with the concept and are shocked that as accounting majors, they have never heard of it before. Double entry accounting has been the standard for over 500 years and it’s about to be completely transformed.
The one thing that bitcoin and blockchain enthusiasts never discuss is the process to “account” for blockchain transactions within businesses. As hope for mass adoption rises, who on earth is going to integrate these transactions into the books and records of a business? The accountants…that’s who!
I would like to say this is my own thesis but as a crypto and blockchain believer, I just think it’s common sense. So, here it is… We have seen some of the largest grocers in the world, like Walmart, migrate their supply chains over to a blockchain. The logical consequence of this is that they will begin to incorporate a blockchain-based method of payment into their ecosystems. Currently, these grocers merely use blockchain technology to properly assign value to assets within their supply chain. However, once they uncover the immense efficiencies in automated payments (through smart contracts) to vendors, suppliers, and producers, they will mandate that those who wish to do business with them have a reserve in a stable coin to facilitate those transactions. Walmart, for example, is creating their own Walmart coin that will be pegged against USD. In the near future, I am convinced that Walmart will mandate the participants in their supply chain to use their Walmart coin to transact. When this happens, the world of accounting will not know what hit them. Every vendor, supplier, and producer will have a significant portion of their transactions occurring in a blockchain and, trust me, this will happen relatively quickly!
As I just outlined above, the first major B2B adoption of blockchain based payments may very well occur in the food industry. Beyond that, other countries, such as China, will roll out their Central Bank Digital Currencies. This will significantly impact the role of the CPA, and the question then becomes, “are they ready to step up?”
Everything related to “transactions of value” in the crypto space needs to be understood by accountants. For example, in addition to consolidating “on-chain” transactions with traditional “off chain” transactions, accountants are probably the best suited professionals to assist in “on-boarding” other assets onto the blockchain. We will take a deeper dive into this concept in Part II of this series. Without this understanding, widespread adoption efforts will slow down dramatically, thus, accountants are the future of the “internet of value.” The faster that accountants learn about this technology, the faster they can work together with regulatory agencies to assist in setting the applicable standards. The mass adoption that crypto and blockchain enthusiasts constantly talk about cannot be achieved unless CPA’s act quickly and with intent.
If we could flip a switch to 2030, then who cares about CPA’s because the accounting profession, as we know it, will be transformed in ways we cannot comprehend today. Why? Because many of the services that CPA’s offer will be displaced with blockchain and smart contract technology. To a certain degree, CPA’s are intermediaries. If you don’t think so, then just prepare your own tax return and you will fully understand why tax preparation services will be displaced. However, in reality, we can’t flip a switch to 2030. Instead, we need to “migrate” slowly but consistently and relentlessly to digital assets with the assistance of CPA’s. These digital assets will all reside in one place… the future of the internet, “the internet of value.”
So, everyone reading this article should contact their CPA’s and ask them if they have a general understanding of blockchain technology. If they do not have a general understanding or even worse if they answer by saying “block what?”? Start looking for another CPA!
