The idea of regulation and compliance might have had a controversial history, but to understand its true identity, we must dig into why it was conceived in the first place. With industries getting more and more crowded, finding a way to bring some order almost became a necessity. Hence, standardizing the industry operations made it easy for the governing bodies to spot any anomalies and address them right away. However, the execution part was barely as hassle-free as it sounds. Time and again, the established regulations would come at loggerheads with companies’ desire to operate in a progressive manner. This would change for the better once technology arrived on the scene, as both companies and regulatory bodies finally had a common approach that served all the interests in play. There were certainly some hiccups along the way due to mismatch in the pace at which the concerned parties were evolving, but some synergy was eventually struck and things looked on the upwards trajectory. Nevertheless, one thing we failed to acknowledge was the fact that with technology we were also bringing in a host of other by-products that would demand to be supervised through their own dedicated channel. The said issue is growing increasingly complex due to new discoveries being made on the technological front, and companies are now seeking clarity so to remain consistent with their long-term strategies.
In a survey recently conducted by Financial Accounting Standards Board, companies have called FASB to define the rulebook on how they can view the cryptocurrency assets within the commercial stratosphere. Apart from cryptocurrency, the survey recipients have also asked for a similar action in the context of energy transactions, which include renewable-energy certificates, carbon-offset credits, and other accreditations that are used to aid gas emission-reduction targets.
The lack of comprehensible rules around these areas has long kept companies from making them a meaningful part of the business. It’s not to say that they don’t already have any sort of presence across the block, but without concrete guidelines, companies are finding it hard to make the stride they know are capable of making. For instance, telecom magnet Charter Communications, and its pursuit to go carbon-neutral has been left in the trenches due to sheer absence of energy transactions-related framework.
While ESG issues are more about moving forward, bitcoin and other cryptocurrencies regulations have a preventive vibe to them. The volatile nature of cryptocurrencies is well-known amongst the industry players; hence the need to tame it is more than evident. Amongst the ones who suggested measures for bitcoin governance was payment services provider, Square Inc. Summing up the company’s reasons, Square Inc. chief accounting officer said:
“We feel it is important that the economic substance of bitcoin transactions be reflected in the accounting model and per discussions with our stakeholders, that is currently not being accomplished,” Ajmere Dale.