Accountants and lawmakers are urging standard-setters to fill a void and write concrete rules telling companies how to account for bitcoin and other cryptocurrency assets, The Wall Street Journal reports.
The assets, for which there are no binding U.S. accounting requirements, have drawn regulators’ interest after sharp swings in recent months and investments by companies such as electric-car maker Tesla Inc. and payment provider Square Inc. Bitcoin, which rose to a record of $63,381 in April, has roughly halved in value since then, mirroring volatility in other digital currency assets.
The Securities and Exchange Commission, which oversees U.S. securities markets, is considering new regulation for the cryptocurrency market to prevent fraud. Chairman Gary Gensler, who taught courses on digital currencies at the Massachusetts Institute of Technology before he took office, has argued that investor protection rules similar to those that cover derivatives and equities should apply to crypto exchanges. The Basel Committee for Banking Supervision, which sets global standards for banking regulation, last month suggested banks dealing in crypto assets should hold substantial buffers to cover potential losses.
There hasn’t been much progress on the accounting front, though. The Financial Accounting Standards Board, which sets accounting standards for public and private companies and nonprofits in the U.S., last year decided against adding the topic to its agenda, saying investing in cryptocurrencies isn’t widespread among companies. Read the full story.