The basis of accounting is fundamentally financial transactions. Consequently, any move towards Bitcoin use by an individual, a business, or a government will significantly affect this profession.
Bitcoin and other electronic currencies have become increasingly popular over the years. While the world has many digital currencies, Bitcoin is the most prominent. Unfortunately, some people are yet to understand the intricacies of its operations.
Nevertheless, people are using virtual currencies to purchase services and goods. Others are trading Bitcoin on platforms like Bitcoin Circuit. Upon registering and making a successful Bitcoinscircuit.com, you can buy and sell Bitcoin for a profit. Ideally, these systems use advanced algorithms to facilitate crypto trading.
Currently, some Fortune 500 businesses are researching Bitcoin and contemplating its adoption. Some banks have even integrated blockchain, the technology behind Bitcoin, into their systems. Others are launching crypto payment apps. And all these activities will affect accountancy in different ways.
Reasons for Businesses to Adopt Bitcoin
An apparent reason why many businesses are contemplating Bitcoin adoption is its ability to work as an incentive for clients and customers to buy something or take the desired action. Bitcoin can incentivize clients to participate in a survey to get a crypto reward.
Some experts argue that Bitcoin could eventually be the currency businesses will ultimately use to pay staff salaries. With online retail stores having many goods that customers can buy with Bitcoin, it’s only a matter of time before this virtual currency becomes a standard payment method. Some even argue that businesses could partly pay their checks with cryptocurrencies.
A move to accept Bitcoin payment for staff salaries means companies will change their accounting procedures. Even how they deal with banks will change. And this would change the entire accounting industry.
Bitcoin Implications for Accountants
A widespread Bitcoin use would affect accountants in how they function in a business environment and offer services. Perhaps, their primary role would be maintaining accurate records. That way, they can ensure compliance with taxation regulations.
When purchasing Bitcoin, a person doesn’t have expectations to meet at a point of sale. However, a person or business is liable for taxation whenever they profit from the sale of something whose value has increased. And this is called capital gains tax.
But, there is an amount for which you can pay a tax. If the asset gain is less than this amount, you don’t pay any tax or report it. Such aspects are vital in accounting when dealing with Bitcoin and other digital assets. In addition to how businesses and individuals treat accounting, accountants and advisers should highlight the dangers of using virtual currencies.
For instance, low or no regulation of the cryptocurrency sector could cause a significant increase in criminal activities like money laundering and financial crimes. Therefore, accounting companies should help their clients in taking better due diligence measures. For instance, they should help screen sanctions, adverse media, and political exposure that could impact Bitcoin value. Accountants should also take appropriate steps and checks to ensure their clients make informed decisions.
The Future
Crypto payments are increasing by the day. Activities like Bitcoin trading are also on the rise. That means Bitcoin is here to stay, and more businesses, companies, and individuals will continue to embrace and adopt it. And these activities will undoubtedly affect accountancy in different ways. For accounting companies and accountants to remain relevant and helpful, they must research the crypto industry and devise ways to fit in the new system. That way, accountancy can play a role in ensuring secure and safe staff payments and business transactions.
