PwC Launches Software For Auditing Cryptocurrency Transactions

Neil Dennis

PwC, one of the so-called "Big Four" auditing firms, announced on Wednesday, June 19, 2019, the launch of a new software package capable of auditing cryptocurrency transactions.

An addition to its existing Halo suite of auditing tools, the new software can be used to provide assurance services for counterparties engaging in digital asset trading. 

Cryptocurrency Ownership

The software is capable of providing evidence of private key and public address pairing in order to establish ownership of cryptocurrency. It can also communicate with the blockchain to independently corroborate information about transactions and balances.

PwC - formerly PriceWaterhouseCooper - said it had already started leveraging its new Halo solution to support audits of its clients engaged in cryptocurrency activities.

The company added:

We are also working with companies, for whom we are not the auditor, to help them address the new opportunities and challenges of blockchain and cryptocurrency, including helping them to implement the processes and controls they will require in order to obtain assurance reports from their auditors.

Big Four Gaining Ground

All four of the large global auditing companies are gathering ground in the cryptocurrency and blockchain industries, as opportunities provided by the growing government and regulatory scrutiny of the sector improve.

Indeed EY, formerly Ernst & Young, launched in March its EY Crypto-Asset Accounting and Tax (CAAT) tool that it rolled-out first to its institutional clients with crypto-assets on their balance sheets.

EY said in a statement at the time that it had seen significant increases in the number of clients that hold and trade cryptocurrencies.

Regulatory Scrutiny

Such tools are likely to become increasingly important as global regulatory scrutiny of the cryptocurrency market intensifies. Later this week the Financial Action Task Force will publish the results of discussions and issue recommendations that are likely to include the obligation to provide on request details of crypto-asset transfers.

James Chalmers, Global Assurance Leader at PwC, said:

It is important as companies continue to digitise we, as auditors, keep up with technology changes in the market, continue to develop audit tools that meet the needs of emerging technologies and serve the changing and developing demands of our stakeholders.

Bank-Backed Cryptocurrencies Are a Decade Away, Says Central Banker

Will Heasman

Former vice president of the European Central Bank (ECB), Christian Noyer, has affirmed that central bank digital currencies (CBDCs) are unlikely to be rolled out for another decade. 

Jumping off the recent uptick in digital asset interest from central banks, as well as Facebook's rocky foray into the industry, Noyer opined that CBDCs are a future potentiality. However, speaking to the Financial Times, the former banker caveated that "hesitations" around CBDCs—arising from privacy concerns and control of fiscal policy—may hinder their launch.

Whether they will enact the projects in the next ten years remains to be seen. I don't think we are close to the departure lounge, but the fact that they want to study it means a lot of work will continue this year.

CBDC Madness

Bank-backed crypto projects seem to be more prevalent than ever. China's implementation of a sovereign cryptocurrency is apparently on track for imminent release—despite multiple flunked deadlines. In fact, it's thought that China's attempt at a CBDC has spurred multiple knee-jerk reactions from other national institutions.    

This appears to be the case for one of the latest—and perhaps most intriguing—CDBC investigations.

Back in January, a central bank collective, comprising of six of the world's top institutions, announced plans to study the benefits of a CBDC.  The collective which incorporates the European Central Bank; the Bank of England; the Bank of Canada; the Bank of Japan; the Sveriges Riksbank; and the Swiss National Bank, and the Bank for International Settlements (BIS) aims to assess several criteria, including:

CBDC use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies.

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