Big Four accounting firm EY is rapidly growing its services for crypto clients. Speaking at the online EY Global Blockchain Summit 2020, Paul Brody, the firm’s blockchain leader, says digital and crypto assets are driving the largest part of its blockchain business.
“We now have more than 130 companies for whom EY does financial statement audits that have material amounts of digital assets and crypto assets on the books. In fact, it’s the single largest part of our blockchain business today. And over on the tax side, we’re about to lose track of the total number of clients that we have served at this point. It’s starting to become quite a large number.”
Brody describes the space as a “rapidly maturing, digital ecosystem” that’s gaining traction both on the enterprise side and with financial institutions.
He points to stablecoins, which are tied to one asset or a basket of assets, as a foundational component for blockchains servicing the financial industry. Two other core components of enterprise blockchain projects are custodians, tasked with keeping digital assets safe, and the complex systems that make up cross-border trade and taxes.
Brody says blockchain can address and streamline processes tied to product origin, a key factor in calculating government revenue.
“We’ve been using blockchain for years to look at the origin of products. Is my win organic? Did it really come from Italy? Is it actually bio-dyanmic? Those are origin rules the consumer cares about. There’s a whole other class of origin rule, and these are the ones that governments care about. And they matter because what the origin of your product is determines whether it moves tariff-free or not through the global trading ecosystem.”
While the maze of tariffs impacts the flow of trillions of dollars in trade, EY reports that companies are not optimizing for the most available tariff rules. The inefficiencies lead to lost revenue and are opening the door for blockchains that can deploy a new set of solutions that redirect how goods move around the globe.
Finally, Brody points to central bank digital currencies as the next wave of digital assets as legacy players try to leverage digital ledger technology to lower costs and settlement times while expanding operating hours.
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