Cryptocurrency risks must be higher understood by way of accountancy profession — ACCA

KUALA LUMPUR (March 14): The Association of Chartered Certified Accountants (ACCA) has reminded expert accountants of the importance of preserving an up-to-date perception of traits in the fast-moving area of cryptocurrencies like Bitcoin.

In a declaration today, ACCA stated the international accountancy profession performs an essential position in enabling secure economies and secure societies where buyers are now not exploited.

As new applied sciences come to be adopted it is vital that expert accountants advance their digital appreciation alongside their ethical duties to flag areas of concern, said ACCA.

“Bitcoin has at least three dimensions that are causes for concern. The first one, its pseudonymous nature means that while one may identify the address a given payment goes to, it is not possible to confirm the identity of the underlying beneficiary,” said ACCA’s Director of Professional Insights, Maggie McGhee.

“This is an obvious risk for money laundering, terrorist financing and the funding of other types of illegal activities. Secondly, its high volatility makes it inherently risky and unstable.

“The third, it is funding a speculative bubble in other areas like Initial Coin Offerings (ICOs) with speculators chasing poorly-formed business propositions,” she added.

ACCA also noted that it is important to avoid blaming the house for the fault of the people living in it. The underlying blockchain (distributed ledger) technology behind Bitcoin could revolutionise how financial transactions are done and have a positive impact on business globally.

This potential must be viewed separately from the risks of Bitcoin, the association said.

ACCA also supports a close relationship between regulators and the accountancy profession to ensure that a robust regulatory approach is crafted, and refined as developments emerge, so that it is fit-for-purpose in a digital age.