write 600 words critical reflective account
vinamit
Group411.pptx
Group 4
Debate points
Simplicity of regulating cryptocurrecy
Are regulators ignoring cryptocurrency?
Legitimisation issues with cryptocurrency
Can existing regulatory framework be used?
Future of cryptocurrency
Simplicity of regulating cryptocurrency
Regulatory framework and fintech will take time to catch up with one another
Are regulators ignoring cryptocurrency?
IFRS has no view on status of cryptocurrency as a legal tender
Legitimisation issues of cryptocurrency
The anonymity makes traceability of transactions difficult
Can existing regulatory framework be used?
To some extent e.g. the impairment losses can be utilised for intangible asset i.e. cryptocurrency
What is it’s future?
It is more of a speculative asset rather than currency
US Financial Crimes Enforcement Network issued guidance on when virtual currency operators
Securities Exchange Commission and the Office of the Comptroller in the United States, have issued white papers and sought comments on how, and whether, current regulations should apply to fintech companies.'
Strategic Modelling supports methods of valuation
Bitcoins can be traded through crypto exchanges
IFRS standards can be implemented although which itself requires to discover variation under intangible assets.
Bitcoin is currency which is people's choice and free from the government regulations for its price fluctuation.
Points of exploration: Affirmative
Simplicity of regulating cryptocurrency
Are regulators ignoring cryptocurrency?
Legitimisation issues of cryptocurrency
Financial users are not in dark
Can existing regulatory framework be used?
What is its future?
Simplicity: what happens if the Bitcoin economy grows faster than the supply of bitcoins
Ignoring: some users will anticipate regulators targeting intermediaries and will act to avoid such scrutiny, just as criminals can pay each other in cash to hide illegal activities from financial institutions.
Financial users: The functionality of crypto exchanges is similar to stock exchanges
Legitimisation: Anonymity removed making a framework to continue in current economy.
What is its future: There is no consensus about an accepted pricing model of Bitcoin
Simplicity: In China, policy was broadly similar, requiring that Bitcoin intermediaries implement know-your-customer registrations for account. it seems longstanding reporting requirements can provide a level of compliance for virtual currencies similar to what has been achieved for traditional currencies.
Ignoring: These features render the conventional tools of financial regulators largely ineffective by increasing the cost of identifying, monitoring and sanctioning market participants
Legitimisation: Using existing conceptual and regulatory framework to adapt to , time loss is recovered
Financial users :An intangible asset is only recognised if it is probable that future economic benefits will flow to the entity and its cost can be measured reliably.it lacks due to acceptability by regulator
What is its future: May not meet the long-term interests of financial market participants, global regulators may take more efforts to better understanding and effectively regulate cryptocurrencies.
Simplicity: Difficulty in imposing constraints by regulators Sheer quantity, geographical distribution and privacy rights of cryptocurrency
Ignoring:
1. For some Argentines, bitcoin users in Argentina trade $70,000-$80,000 over the counter per day. The use of bitcoin in Argentina is "Very real, people using bitcoin do not know technology, they are not financially savvy." It solves problems for people
2. Virtual currency is defined under relevant Argentine law as "The digital representation of value that can be used for digital commerce and whose functions are to provide a medium of exchange, and/or a unit of account, and/or a store of value, but they are not legal tender, nor issued or backed by any country or jurisdiction." On May 27, 2014, BCRA issues a statement stating that it does not consider bitcoin or other virtual currency to be legal currency
3. It solves immediate problems and it has the potential to democratize money
4. Bitcoin operates through the use of a blockchain. The basic premise of the blockchain is that every transaction gets added to a public register and assigns a unique code so that it is impossible to fake a transaction. Each legitimate transaction is verified by a network of computers. Thus, bitcoin is a "decentralised, anonymous, self-verifying and completely reliable register. It allows entities to safely transfer value without the aid of any bank or state government."
Financial users: Subjective application of IFRS
Legitimisation: Agreement on accounting language is a presiding issue that has not been resolved for normal currencies, as of yet
What is its future: Although the bitcoin market becomes unstable for a while immediately after the introduction of the future market over time the marketing becomes more stabilized than it was before
Simple: Bitcoin is not tied to any specialized payment system and can be more widely adopted than previous digital currencies, it’s a self-sustained system in contrast to prior digital currencies.
Ignoring: IAS8 allows an entity to use its judgement in developing an accounting policy that results in information.
Legitimisation : Before criticizing the bitcoin we need to let it prevail in the economy to see if it can be legitimising.
Financial users: Some accountants contemplate the holdings of Bitcoin as possibly coming under IAS 16Property, Plant And Equipment, or IAS38 Intangible Assets.
What is its future: The future of crypto accounting will be complex and constantly evolving, but the role of technology has opened new opportunities to develop solutions that solve industry challenges.
References
AhmetSensoy, E. S. C. K. N., 2019. The development of Bitcoin futures: Exploring the interactions between cryptocurrency derivatives. Finance research letters.
Anon., 2018. EY applying IFRS accounting by holders of cryptocurrency. [Online]
Available at: https://www.ey.com/Publication/vwLUAssets/EY-applying-ifrs-accounting-by-holders-of-crypto-assets/$File/EY-applying-ifrs-accounting-by-holders-of-crypto-assets.pdf
Anon., 2018. mazars. [Online]
Available at: https://eng.mazars.de/Home/Latest-news/News/Archiv-2018/Bitcoin-in-the-financial-statements-HGB
araya, d., 2018. Techtank. [Online]
Available at: https://www.brookings.edu/blog/techtank/2018/10/10/the-future-of-cryptocurrency-regulation/
Cecily, 2015. Accounting issues related to bitcoin. Wiley periodical 2015.
collis, J., 2015. Regulatory framework for FR. In: Business accounting. s.l.:s.n.
despchapell, a., 2014. why regulating the bitcoin wont work. [Online]
Available at: https://www.coindesk.com/why-regulating-bitcoin-will-not-work
Engle, E., 2016. Is bitcoin rat poison?. CCC, Volume 16, p. 340.
Funderburk, K., 2019. The regulatory review. [Online]
Available at: https://www.theregreview.org/2019/07/31/funderburk-regulating-cryptocurrency/
Hurlburt, G., 2014. Bitcoin: benefit or curse?. IT professional, 16(3), pp. 10-15.
magnuson, w., 2018. Financial regulation in the bitcoin era. law journal library, Volume 2.
Rainer, B. N. T., 2015. Bitcoin: Economics, Technology, and Governance. Journal of economic perspectives, 29(2).
SamuelVigned, S. B. M., 2018. Bitcoin futures-what use are they?. economics letters, Volume 172, pp. 23-27.
Financial Regulation in the Bitcoin Era by William Magnuson. Stanford Journal of Law, Business & Finance, 04/2018, Volume 23, Issue
EEG MEETING, MAY 2018, AGENDA PAPER 2D. Digital currency – A case for standard setting activity. A perspective by the Australian Accounting Standards Board (AASB)
