Published in · 7 min read · Jun 28, 2022
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Almost all cryptocurrencies run on blockchain infrastructure. This infrastructure is the basis of various advantages that cryptocurrencies offer, such as security and decentralization. For this reason, it is important to analyze the development of the cryptocurrency market, especially Bitcoin, not only in terms of price but also in terms of its infrastructure. Because the most important feature sought in an investment instrument is the reliability of the investment. Therefore, trust in cryptocurrencies is directly proportional to trust in blockchain. The more questions about the security of blockchain technology in the world decrease and the more widespread this infrastructure becomes; the more cryptocurrencies are expected to be positively affected.
For blockchain technology to gain acceptance in various fields and at the international level and reach a significant financial size, it is key that it is integrated with commercial institutions and public organizations. The Big 4 audit firms; Ernst & Young, PwC, Deloitte, and KPMG, can be considered as an ideal distribution network for this integration to reach almost every organization. Therefore, this article is written to understand the role of the Big 4 audit firms in the development of cryptocurrencies.
KPMG offers blockchain and cryptocurrency services separately. Clients interested in blockchain technology can receive support from KPMG at every step in the integration process of this technology. KPMG first examines whether the client’s company needs blockchain. However, companies can also receive support from KPMG on issues such as installation, algorithm selection and system operation. Currently, KPMG has a supply chain system built on blockchain for the pharmaceutical industry.
In the field of cryptocurrencies, KPMG informs its clients about the risks of cryptocurrencies. It can be said that the company has a more skeptical approach in this sense. The security levels of cryptocurrencies other than Bitcoin can be controversial despite the blockchain system. KPMG’s biggest recent breakthrough in this area is their system called Chain Fusion. Launched in 2020, this product gathers clients’ cryptocurrencies and digital assets under a single roof. Clients can integrate their cryptocurrency wallets into Chain Fusion, which also offers custody services, and track their transactions. In this way, KPMG unites wallets or cryptocurrencies with separate blockchain networks under a single roof.
Sam Wyner, a director at KPMG, explained that they have been in high demand from US clients, especially after the cryptocurrency-friendly decisions taken by the US Banking Authority OCC. Sam Wyner also stated that with the spread of the CBDC (Central bank digital currency) trend, he expects the interest in cryptocurrencies to increase both individually and institutionally.
E&Y has the most comprehensive blockchain solutions among the Big 4 audit firms. In particular, the company’s use of the public Ethereum blockchain network is a significant feature that sets E&Y apart. The company provides services through 6 main services.
- Cryptoprep
While cryptocurrencies are the subject of a new debate every day in the US, there is no clear legal infrastructure in the country yet. The taxation of cryptocurrencies, which is changing day by day, is one of the most important problems of US users.
Cryptoprep offers users the opportunity to manage their cryptocurrencies without the need to follow current taxes and regulations. In this system, users integrate their wallet balances and transaction history into the system. The system automatically completes the necessary tax forms and transactions that need to be done, allowing users to use their cryptocurrencies easily.
- Opschain
One of the most known use cases of blockchain is logistics. Managing supply chains is challenging, especially as international trade is becoming increasingly complex. Opschain organizes users’ supply chains with smart contracts. It also complies with the legal systems of different countries. Users can create tokens on Opschain for their logistics services and exchange them with other parties in the supply chain to create a secure trading infrastructure.
- Tesseract
Tesseract provides services in the field of transportation mobilization. Users can buy, sell and rent vehicles through Tesseract and become partners in vehicle fleets. The system ensures the security of the transaction by transferring tokens to its users in purchase-sale and rental transactions. Users can also partner with fleets on the system and get a share of the fleets’ revenues and earn passive income. In this system, all transactions are supported by smart contracts.
- Insurwave
Insurwave is an insurance and risk management service. It provides services especially in the field of maritime trade. Since maritime trade is an area subject to international and many different laws, it is a very complex area in terms of ensuring the trade, making reimbursem*nts within the scope of insurance, and performing risk management for companies. Users can directly adapt to different legal regulations and practices in other areas through insurwave. With distributed ledger technology and smart contracts, users get real-time data. In this way, faster risk management can be provided on the current commercial flow and fast decisions can be made.
- Blockchain Analyzer and Token Review
Users use this system to analyze any blockchain network and token. Since transactions on the blockchain network are permanent, the system analyzes previous transactions and checks the security of the code written. As a result of these results, the network is tested with simulations involving different scenarios, and it is learned whether the analyzed network and token are suitable for the user’s own business model.
- Explorer Visualizer
This service provides services for monitoring and modeling transactions in blockchain networks. By analyzing transactions on the blockchain, anomalies and malicious transactions on the network are analyzed and modeled. Users use this service mostly to question network security.
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PwC is more prominent in the field of cryptocurrency and blockchain technology with its data collection and reporting. PwC regularly conducts surveys and publishes various reports on both the use of blockchain technology and the functioning of the cryptocurrency market. These reports provide reliable information on how healthy the market is, trends and market direction.
In PwC’s latest report, blockchain technology is expected to contribute USD 1.76 trillion to the global economy by 2030, while creating 40 million jobs. Blockchain is expected to develop especially in 5 main areas. These areas are:
- Product tracking systems
- Financial services and payment systems
- Security of credentials
- Contract operation and controversial decision solutions
- Customer relations and reward programs
as the most important factor in the development of the country’s economy.
The countries that will benefit the most from blockchain technology in the next 10 years are China, the US and Germany, respectively.
Again, PwC’s survey of global companies reveals that companies have passed the stage of recognizing blockchain technology and are at the stage of implementing business models integrated with this technology. In addition to all reports and surveys, it is also possible to access educational content on blockchain and cryptocurrency on PwC’s website.
In addition to surveys and reporting, PwC offers an audit service called Halo. By using the Halo service, users can safely protect the private and public keys of cryptocurrency wallets and get useful information about the security of the network by receiving an audit service about the blockchain network used by the cryptocurrency. More importantly, users can insure their cryptocurrencies on Halo. Halo is currently available for Bitcoin, Bitcoin Cash, Bitcoin Gold, Litecoin, Ethereum, Ethereum Classic, Tezos, various ERC20 tokens and XRP.
Like the other three audit firms mentioned above, Deloitte provides consultancy services to its clients on blockchain and cryptocurrencies and provides support from the beginning to the end of the process for the integration of blockchain technology if it is suitable for the business model of its clients. In addition, in this process, if it offers a more effective solution, it also provides token creation services in accordance with the business model and ensures that customers have up-to-date infrastructure on the ever-changing taxes and regulations of cryptocurrencies.
Deloitte currently advises on blockchain and cryptocurrencies internationally in finance, entertainment, healthcare, real estate, manufacturing, transportation, and utilities.
The various blockchain solutions offered by the audit firms listed above provide a striking picture of how efficient and far-reaching this infrastructure has the potential to be. These audit firms have been offering blockchain solutions to their clients for at least 2–3 years. Nowadays, with the development of the legal infrastructure, corporate companies investing more in the cryptocurrency space have been familiar with the infrastructure used by cryptocurrencies for some time thanks to the audit companies. Therefore, institutional investors’ demand for cryptocurrencies stems not only from the financial benefits to be derived from this market, but also from the fact that blockchain technology is being used in a wide variety of fields due to the increasing confidence in it.
Anyone who has been following the market for at least 1–2 years will have noticed that the concerns about cryptocurrencies are gradually changing shape. Whether cryptocurrencies are safe or not, or whether this system can be interpreted as a Ponzi scheme, are no longer common questions today. Today’s discussions are more often seen as useful critiques of the various financial solutions offered by cryptocurrencies. Therefore, it can be said that audit firms have a very important share in this transformation.
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