Cryptoassets have arrived, but what will it take to secure their future? Institutionalization, says KPMG report from 15 November 2018.

Key challenges remain including cyber security, regulatory compliance, fork management and accounting.

The future success of cryptoassets will depend on the ability to institutionalize them by building trust and facilitating scale, with participation from both traditional and emerging players within the global financial services ecosystem, says a new report, Institutionalization of Cryptoassets from KPMG, with contributions from Coinbase and other industry companies.

The report points out that recently there has been a wave of new entrants in the market, such as established financial services institutions, security token platforms and crypto exchanges, who are launching various crypto products and services for the emerging blockchain-based tokenized economy. It suggests the tokenized economy will likely be one of the more significant innovations enabled by crypto.

Authors of the paper also suggest that crypto represents an opportunity to potentially transform the financial services sector and create a truly open global financial system.

The report takes an in-depth look at some of the key challenges facing crypto including:

- compliance with regulatory obligations;

- know your customer (KYC) and asset provenance;

- securing cryptoassets;

- accounting and financial reporting;

- tax implications;

- fork management and governance.

The report says of the 2,000 plus cryptoassets issued or mined, many, including those with high valuations, don't have a functional product associated with them.

Is crypto a solution looking for a problem? No, there are real problems that cryptoassets are looking to address and their staying power will be defined by their ability to reduce friction and inefficiencies that currently exist within the global economy.

Read the report...

Source: KPMG International.