November 19, 2018 | AtoZ Markets
Not yet time. There is still more work to do. KPMG's recent findings about Cryptocurrency said they are not yet reliable store of values.
KPMG has just released its recent findings about the viability of Bitcoin and the cryptocurrency market generally. KPMG is one of the world's big four auditing firms alongside Ernst & Young, Princewaterhousecoopers and Deliotte. In its findings, it concludes that Bitcoin and other cryptocurrencies are yet to have reliable store of values and therefore not yet real medium of exchange. While that might be possible in the future, they are currently far from it. The report suggests that the digital currencies' unscalability and lack of trust must be overcome. In other for this to happen, the report suggests that cryptocurrency must be institutionalized for it to thrive. KPMG chief economist Constance Hunter said
'more application from the broader financial services ecosystem will help drive trust and scale for the tokenized economy''
How Cryptocurrency could mount the next step of scalability
According to the report, large scale involvement from banks, Fintech companies, payment institutions, broker-dealers, exchanges are what the Crypto economy needs to better integrate into the current global financial system and fulfill its potentials.
Currently, the Crypto market is primarily driven by speculations at the retail level. Traders and investors are betting on the potentials of Cryptos rather than what they can actually deliver. The sector is also largely unregulated thereby creating room for fear and lack of trust. In the report, KPMG mentioned compliance with regulations as one of the challenges the industry is having, adding that Crypto businesses would have to define their products and services clearly before reliable regulators.
In addition, the industry should have a strict and cogent approach to determining legal parameters which will uphold it. This will create an atmosphere of trust and reality (instead of speculations) and therefore attract big businesses to the industry. This will also cut down volatility, drive in huge scale and thereby increase market liquidity.
Time will tell
Coinbase, which contributed to this report, added that the Crypto industry would gradually mature and transit from an industry driven by mere speculations to one managed by world's giant financial institutions. The crypto exchange firm added that it would feature ''high frequency, low latency matching engine, transparent and efficient price discovery tools'' as part of its effort to build truly scalable platforms required by 'large players to enter the space''.
On a final note, the KPMG ended the report quite optimistically, suggesting that the revolution and dominance of crypto assets will eventually happen. The current challenges the industry is facing, according to the report, are mere pains that come with transitional and revolutionary growths. It predicted that the digital assets would be a standard among the people in the future as their trust in them grows. Meanwhile, the report said people's trust will come when crypto-based institutions find solutions to manage compliance, taxes, software upgrades (hard forks), financial auditing and asset provenance.
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