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How the U.S. Blockchain Regulation Climate Will Determine the Future of Global Commerce

Blockchain technology can have a tremendous impact on businesses. At EisnerAmper’s Process Risk and Technology Solutions (PRTS) Summit Adapting to Change in a World of Evolving Technology, a trio of panelists discussed “How the U.S. Blockchain Regulatory Climate Will Determine the Future of Global Commerce.” The panel included experts from varying business sectors, each providing a different vantage point to the effects blockchain technology has on them. Dara Albright, an advisor with EisnerAmper; Jason Juliano, CEO of Aponia Data; and Vincent Molinari, co-founder of Templum Inc. covered topics ranging from digitizing assets to changes in regulations and shared examples on how blockchain has already begun to impact certain companies, business sectors and parts of government.

Digital Assets

Blockchain technology has allowed for the digitalization of many different types of assets. Doing so significantly increases the liquidity of assets and paves the way for other methods to invest including new investment vehicles. The panel feels that private, unregistered securities will be the segment that is most impacted. Individuals and corporations will be able to buy and sell portions of ownership in property as is currently done with companies on the stock market.

One of the challenges is figuring out how to regulate this emerging market, given that there is no standardization at this point in time and the possibility of investment vehicles that have not been created yet. Regulators are playing catch up as they try to determine what controls need to be put in place to allow auditors to be comfortable with the new types of transactions. Furthermore, regulators are still seeking a compressive tax policy that correctly categorizes the different digital assets and reflects their change in value and ownership.

Enterprise Market

Although it is harder for smaller companies, it is becoming increasingly more necessary for all companies to integrate blockchain technology or risk being left behind. Customers are dictating what they want. In one very notable example, Walmart is looking to have many of its vendors on their blockchain network. This would provide Walmart unprecedented transparency over the life of every single product it sells by tracking every good it sells -- from the harvesting of raw materials, to the creation of a finished good, to the shipping of the good to the store, and to the final point of sale. This allows Walmart, and other companies who are following suit, to provide greater assurance to their customers, investors and regulators because blockchain allows for the creation of an immutable audit trail.

What Now?

It may seem rather basic, but if a company wants to be able to successfully adopt blockchain technology, it needs to understand its internal processes and all of the different players it interacts with. Blockchain is simply a technology; it is not some magic software that will fix all of the company’s problems. If a company is able to strengthen its understanding of how it does business at a granular level and keep its eyes open to the new standards and regulations, it company will find success in adopting blockchain technology.

Process Risk and Technology Solutions Summit Blog Series

Derek Notta specializes in Process, Risk, and Technology Solutions (PRTS) with an integral role in numerous Sarbanes-Oxley Section 404 compliance, and internal audit engagements including evaluating the design and operating effectiveness of controls.

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