The Canadian arm of audit and advisory network KPMG has made an allocation to Bitcoin and Ether for its corporate balance sheet, marking the organization's first direct investment in digital assets.
The allocation to crypto-assets is the first investment of its kind for KPMG, one of the world's "Big Four" accounting firms. It said the decision reflects its commitment to new technologies and asset classes. The investment includes Bitcoin (BTC) and Ether (ETH), as well as carbon offsets to maintain a net-zero carbon transaction and meet the firm's stated environmental, social and governance (ESG) commitments, according to a press release.
Investing in the emerging asset class
According to a representative of the Canadian KPMG organization, crypto assets are a maturing and promising asset class. The investment illustrates the company's outlook on emerging technologies enabled by blockchains, he said. The crypto industry is growing rapidly and should be taken seriously by financial services firms and institutional investors, he said.
"Investors ranging from hedge funds and family offices to large insurers and pension funds are becoming increasingly involved in crypto assets. Traditional financial services providers such as banks, financial advisors and brokerage firms are looking into offering products and services related to cryptocurrencies. This investment reflects KPMG Canada's belief that institutional use of crypto assets and blockchain technology will continue to grow and become an integral part of the asset mix." - Benjie Thomas, Managing Partner of KPMG Advisory Services in Canada
KPMG established a standalone committee responsible for overseeing and approving the balance sheet allocation. The committee was comprised of representatives from diverse areas and conducted a rigorous risk assessment process. The procedure included a review of regulatory, reputational and custodial risks. KPMG specialists also assessed the tax and accounting implications of the transaction. They acquired Bitcoin and Ethereum through the execution and custody services of Gemini Trust Company LLC.
Bitcoin as part of balance sheet strategy
The audit and advisory firm join other large firms that have added cryptocurrencies to their balance sheets. Among the most prominent examples are Elon Musk's Tesla and Michael Saylor's MicroStrategy. For the latter, KPMG US was already an auditor during the first bitcoin allocation in 2020, so confronting cryptocurrencies is nothing new for the company.
In addition, KMPG has been offering a range of consulting services related to crypto-assets for some time. Among them are educational workshops, vendor assessments and compliance program reviews. According to the press release, Canada-based KPMG plans to continue investing in a strong crypto practice and expand its services in the areas of decentralized finance (DeFi), non-fungible tokens (NFTs) and Metaverse. Finally, the company said it expects to see strong growth in these areas in the coming years.
