Back in November 2020, KPMG, “a British-Dutch multinational professional services network, and one of the Big Four accounting organizations”, said in a research report that cryptoassets like Bitcoin were not suitable as “a store of value.” Now, KPMG in Canada says that it has added $BTC and $ETH to its corporate treasury.
Less than two and half years ago, KPMG, which is headquartered in in Amstelveen, The Netherlands, released a research report titled “Institutionalization of Cryptoassets”. In that report, KPMG said that although cryptoassets can a unit of account, they did not fulfill the requirements of store of value or medium of exchange.
In particular, here is how it explained that cryptoassets like Bitcoin did not yet have a store of value use case:
“To fulfill the requirements of store of value, cryptocurrencies must be much more stable. Consider for a moment extending a person or entity a loan in a cryptocurrency. The value is too unstable at the moment to be assured repayment. Under these conditions, neither lenders nor borrowers would be willing to take the risk of transacting in cryptocurrencies. After all, extending credit in a currency that risks significant devaluation-or borrowing if the value appreciated beyond the borrower’s ability to pay. would be a fool’s errand.”
Well, the company seems to have a different opinion of cryptoassets — at least Bitcoin ($BTC) and Ethereum ($ETH) — these days.
In a press release issued on Monday (February 7), KPMG in Canada announced that it had “completed an allocation of cryptoassets to its corporate treasury, the firm’s first direct investment in cryptoassets.”
The press release went on to say that “the allocation includes Bitcoin (BTC) and Ethereum (ETH), as well as carbon offsets to maintain a net-zero carbon transaction to deliver on the firm’s stated environmental, social and governance (ESG) commitments.”
Benjie Thomas, Canadian Managing Partner, Advisory Services, KPMG in Canada, had this to say:
“Cryptoassets are a maturing asset class. Investors such as hedge funds and family offices to large insurers and pension funds are increasingly gaining exposure to cryptoassets, and traditional financial services such as banks, financial advisors and brokerages are exploring offering products and services involving cryptoassets. This investment reflects our belief that institutional adoption of cryptoassets and blockchain technology will continue to grow and become a regular part of the asset mix.“
KPMG established a governance committee to provide oversight and approve the treasury allocation. The committee included stakeholders from Finance, Risk Management, Advisory, Audit and Tax, and it undertook and completed a rigorous risk assessment process that included a review of regulatory, reputational, and custodial risks. KPMG specialists also assessed the tax and accounting implications of the transaction.
Kareem Sadek, Advisory Partner, Cryptoassets and Blockchain Services co-leader, KPMG in Canada, stated:
“The cryptoasset industry continues to grow and mature and it needs to be considered by financial services and institutional investors... We’ve invested in a strong cryptoassets practice and we will continue to enhance and build on our capabilities across Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs) and the Metaverse, to name a few. We expect to see a lot of growth in these areas in the years to come.“
The press release also mentioned that KPMG in Canada purchased the Bitcoin and Ethereum on its balance sheet via Gemini Trust Company LLC’s execution and custody services.
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.