Why Accountants Are Now Learning About Bitcoin

Bitcoin is becoming integral to modern finance, and accounting bodies now see it as both an opportunity and a risk. Recognizing this shift, AICPA & CIMA are starting to take the lead in educating accountants about this new asset class. Last week, they hosted the “Blockchain, Bitcoin & Power BI in the Finance & Accounting Industry” event. This marked an important step in AICPA & CIMA engagement as thought leaders in the bitcoin economy.

James Dewar delivered a talk on the importance of including bitcoin in accounting education. Dewar, a CIMA-qualified accountant with 20 years in financial services, also holds a Research Master’s in Finance and Accounting, where his dissertation compared bitcoin with gold.

Bitcoin can be described as a network communication protocol, similar to TCP/IP, one of the protocols underpinning the internet. Bitcoin’s design includes a difficulty adjustment algorithm, ensuring a stable issuance rate. This scarcity makes bitcoin unique, unlike fiat currencies that can be increased in supply by private banks, central banks, and governments. It’s open-source and decentralized nature further distinguishes it, making it resilient against central control.

Bitcoin’s fixed supply and decentralization set it apart from traditional currencies and other cryptocurrencies. Unlike proof-of-stake systems, which mirror existing financial structures, bitcoin’s proof-of-work system provides security and scarcity with no central controlling entity. Creating scarcity in an environment like the Internet, designed for infinite replication, is an important advancement and is now being recognized by accounting bodies.

Dewar stressed the need for accountants to be well-versed in bitcoin to identify strategic threats and opportunities posed by this technology. He said that including bitcoin in accounting curricula and on risk registers is crucial for future-proofing financial knowledge. Once this asset comes to the attention of finance and risk teams, ignoring it could be considered negligent.

The Strategic Use Of Bitcoin in Business

MicroStrategy, led by CEO Michael Saylor, has adopted bitcoin as its primary reserve asset. This shrewd move demonstrates how bitcoin can serve as a strategic tool for corporate growth. Other companies are following suit. For instance, Metaplanet, a Tokyo-based investment firm, recently followed Microstrategy’s lead.

This decision was influenced by Japan’s high debt levels and the declining value of the yen. Metaplanet sees bitcoin as a hedge against these economic challenges and a way to stabilize their financial outlook.​ Semler Scientific has also announced plans to adopt bitcoin as a reserve asset, showing the growing trend of companies capitalizing on bitcoin for financial stability and growth.

Businesses in various sectors, including energy and waste management, leverage bitcoin for economic benefits. For instance, companies now use excess methane to power bitcoin mining, turning a waste product into a revenue stream. Bitcoin mining is also helping to build out renewable energy projects by acting as a buyer of last resort for excess energy, which can stabilize the grid and make renewable infrastructure more viable.

Implications For Finance

The integration of bitcoin into corporate finance is not limited to MicroStrategy. Pension funds like the Wisconsin Pension Fund are now allocating assets to bitcoin ETFs. This trend reflects a growing recognition of bitcoin’s value proposition and its positive impact on a portfolio’s Sharpe ratio. The BlackRock Bitcoin ETF reached nearly $10 billion in assets within 49 days, further highlighting the demand for bitcoin investments.

The Role Of Accountants

AICPA & CIMA’s initiative to incorporate bitcoin education into their programs is timely. Forward-thinking bodies understand that knowledge of bitcoin is essential for accountants. Dewar’s presentation provided tangible reasons why bitcoin needs to be taught: both potential and pitfalls which organisations need to identify, exploit or mitigate.

Bitcoin’s unique characteristics—decentralization, scarcity, and security—make it an important asset for modern finance. Accountants must be equipped with the knowledge to navigate accordingly. Failing to include bitcoin in educational curriculums could leave accountants unprepared for the future.

AICPA & CIMA’s efforts to educate their members about bitcoin are the first of their kind within this sector. With leaders like James Dewar at the forefront, the accounting profession is well-positioned to embrace this new asset class. Understanding bitcoin is no longer optional; it’s necessary for anyone involved in corporate finance and risk today.

Accountants must learn about bitcoin to provide additional value to their employees. This milestone event marks the beginning of a new chapter in accounting education, one where digital assets like bitcoin take center stage.