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TECHNOLOGY
Tackling the IT

challenges of dealing

with cryptoassets

Digital assets, from bitcoin to tokens, are a new asset class that
challenges technology used for enterprise resource planning and

financial reporting. Here’s what you should consider if you decide to

take on these challenges.

By Sabine Vollmer

f you are wondering whether your business authoritative accounting or audit guidelines on
should get into cryptoassets, you’re in good how to treat this new class of assets, which most About the
Icompany. More than 70% of finance professionals countries do not accept as legal tender. Also, carry- author
worldwide surveyed by Deloitte in 2021 said ing cryptoassets on the books requires customized Sabine Vollmer is
they considered adopting blockchain and add-ons to traditional ERP systems and new a senior editor at
cryptoassets as a potential competitive advantage policies and procedures. the Association
for their organizations. of International
Digital assets, or cryptoassets such as bitcoin and WHY CRYPTOASSETS ARE KRYPTONITE Certified
ether, are projected to transform global financial FOR ERP SYTEMS Professional
markets in the next five to 10 years (see the sidebar Cryptoassets’ unique characteristics are a challenge Accountants,
“The Rise of Cryptoassets”), but trading or invest- for traditional ERP systems, Jacob said. Trying to representing
ing in them, or accepting them as payment, poses use traditional ERP systems to handle cryptoassets AICPA & CIMA.
challenges. is like “trying to fit a square peg into a round hole.”
One of the biggest hurdles is that traditional Firstly, cryptoassets are tracked to 16 decimals or
enterprise resource planning (ERP) technology more. General ledgers in traditional ERP systems
isn’t made to account for or track cryptoassets on can handle up to eight decimals, but legal tender is
the books, which presents regulatory and compli- often rounded to two decimals. How many places
ance problems. a system can track to the right of the decimal point
“It’s a total blind spot,” said Aaron Jacob, CPA, makes a difference with cryptoassets, said Rob
CGMA, who heads the ERP business at TaxBit, Loban, CPA, a senior vice president and head of
a U.S. accounting and tax software provider for accounting at BlockFi, a U.S. crypto-based financial
digital assets. services company. “There’s real dollar value once you
Several forces contribute to this blind spot. start to go out past six decimals and lots of activity
Cryptoassets are a new class of assets with unique that you need to pick up.”
characteristics. There’s some tax guidance, but no Secondly, the many pieces of information that

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