There are four most important cryptocurrencies viz Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), and IOTA (MIOTA) as per KPMG’s insight blog titled, “Cryptocurrencies: Do they matter to corporate treasuries?”
One of the Big Four auditors KPMG is a network of professional service firms that provides tax, advisory, and financial audit services. With large companies like Bosch, Volkswagen, Santander, and BMW jumping on the “crypto-bandwagon” KPMG try to answer the importance corporate treasuries should be attaching to crypto coins.
Talking about cryptocurrencies, it states they are created on a decentralized basis by the user community with a limited supply. Additionally, by waiving central institutions, they make real-time payments with practically no fees in a secure manner possible.
“There are about 1,5001 different cryptocurrencies, of which bitcoin, Ripple, Ethereum and IOTA are the four most important.”
Explaining about the leading cryptocurrency, the author Christoph Polus, Manager, Finance Advisory covers the basic aspects of how exactly Bitcoin network works. It further touches upon the criticisms against Bitcoin because of its “unwieldy money (or coin) creation and transaction handling process.”
Pointing out the drawbacks associated with the flagship cryptocurrency, the author notes the comparatively slow transaction processing and the power consumptions which last year has been put at an estimated 130 TWh.
“Bitcoin plays a pioneering ideological and technological role and demonstrates that cryptocurrencies are essentially technically feasible.”
From the corporate and treasury perspective, the author says “bitcoins are not necessarily the focus of attention.” However, he does state that in developing countries where corruption is rife and currency system is unstable, BTC has a possible application scenario.
However, there are certain limitations to that as noted by the author, in terms of legal issues,…