Since it was first introduced in 2009, Bitcoin and other cryptocurrencies have changed the financial world as we know it. Due to the untapped potential and the limitless capabilities of the blockchain technology, cryptocurrency grows every day and more currencies are created every week.
This growth has resulted in many changes, both positive and negative. At the end of 2017, a crash in the market resulted in investors losing their valuable investments while the next year or in 2018 we’ve witnessed stabilization of the market. In 2019, we can finally be more optimistic, thanks to the upcoming trends that reveal how cryptocurrency will be accepted in the financial industry.
So, what will the crypto trade look like in 5 years from now?
Increased Investments in Knowledge and Education
Schools and universities will offer programs and courses to educate bookkeepers, future accountants, and CPAs on cryptocurrencies. Few schools today offer these services, however, the more popular cryptocurrencies become, the bigger the need will be for new experts to understand and hopefully teach the fundamentals of digital currency.
Some businesses and organizations offer services to accountants as certified crypto tax experts, however, schools will remain the best trainers in the accounting industry. By teaching students before they start their careers, schools can prepare students to operate effectively in a new environment with new expectations and responsibilities. Businesses will need new accountants who are familiar with the evolving needs and trends on the market.
For accountants who are already out of school, the options for continuing with education will go from useful to obligatory. More crypto trading means more crypto companies and more crypto investors. Those organizations need experts who understand cryptocurrencies.
AI (Artificial Intelligence) Accountants
Accounting experts will use better and improved tools to help their clients and investors make smarter decisions. However, the public won’t need real (or traditional) accountants for their crypto investments. They will turn to AI or Artificial Intelligence tools that don’t require human interaction in most scenarios related to accounting.
In the near future, we will see people interacting with intelligent AI tools, bots capable of language processing, machine learning, and more. Challenging concepts like crypto cost isn’t going to be a threat to smart systems. Accountants will still have work, however, their duties will expand drastically as crypto makes changes in the overall financial industry.
The truth is that not everyone will feel comfortable doing taxes through AI. The accountants will need to lean on tools to keep up with the trends while heavy investors and enterprise clients will prefer the natural or human touch.
With more improvements and money going toward tools and fewer resources going toward human intermediaries, all accountants must specialize and adapt to the trends in order to stay relevant.
More of STOs (Security Token Offerings)
In the next few years, expect to see more of STOs. STOs or Security Token Offerings are financial instruments that operate the same way as ICOs or Initial Coin Offerings. Both instruments are equivalents of IPOs or Initial Public Offerings which are used to raise money that are used to finish a specific business project.
While STOs and ICOs are quite similar, they also have differences such as:
- STOs are regulated by the SEC or Securities and Exchange Commission in the US, whereas ICOs aren’t regulated.
- When it comes to the level of security, STOs are regulated by the SEC meaning they are subjected to various standards that provide the safety of the investor. ICOs are susceptible to scams and fraud because they are not subjected to a specific set of standards.
- Most STOs are backed by shares, company stocks, and other commodities while ICOs are the investment themselves. They don’t have the same safety cushion that STOs have.
Based on these differences, it is safe to say that this and the next five years will be the years of STOs as they are more likely to be controlled and regulated in a legal and financial manner. ICOs will not be erased for good, instead, they will gain interest from businesses who need a guarantee of being legitimate.
As the popularity of cryptocurrency grows, traditional services will automate their work to keep up with the newest trends, as well as, with the increased workload. Up until now, the spreadsheets work well for transactions, however, in the crypto industry, static tools can’t serve anyone with serious investment.
Average customers can do their taxes online through H&R Block and TurboTax. Businesses require more personalized care, however, standard programs can handle the workload for most people, When it comes to tax programs, they don’t need to offer advanced options, at least not yet.
Cryptocurrencies make things more complicated. For examples, accountants need automated tools to track crypto complexity. Without a smarter tool, financial experts won’t be able to keep up with higher standards and needs.
Revised Regulatory Standards
The more the crypto industry changes, the more regulations and rules will change with it. Every business that works with cryptocurrency will discover new laws. Soon, every project and company that deals with bitcoin or another cryptocurrency will need an accountant with crypto knowledge to help navigate the situation.
Businesses will invest more in crypto accounting solutions. Machine learning and Artificial Intelligence learning will do the hard work while human accountants work with the data to help business owners make smarter decisions. The technology will keep on improving to cater to this audience.
Before you know, crypto accounting will become an industry unto itself.