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Ten questions every board should ask about cryptocurrencies


The cryptocurrency space has two opinionated and well defined groups—believers and nonbelievers. To date, there has been little middle ground. However, this is quickly changing. Indeed, financial services firms are seeing increasing demand from their customers for access to Bitcoin and other cryptocurrency-related products, and the capital markets also are confronting a broad set of crypto-related developments. As the space continues to develop, other organizations are exploring whether to get involved, and where to begin.

Given the dynamic nature of the market, the emerging legal and regulatory climate, and the sheer volatility of crypto assets, it can be a daunting task to define the space or even understand the strategic rationale of introducing a cryptocurrency into an organization. This is especially true for directors and executives who may not be well versed in cryptocurrencies, their limitations, or even the underlying technology—not to mention the regulatory, risk, accounting, data security, and tax considerations that arise when dealing with a new asset class or service offering.



Download
Ten questions every board should ask about cryptocurrencies
We've outlined questions to help boards engage in constructive dialog about the potential strategic fit of cryptocurrencies.
What are the realistic use cases for our organization?
Are there new cryptocurrency-driven offerings that we could provide?
How will extreme changes in valuations or volumes (5x-10x) impact the strategy?
Does management have an effective system in place to model, manage, and balance risks and opportunity cost?
Is internal audit equipped to offer independent assurance of the technology, policies, and controls?
What are the legal and regulatory guidelines, and how will the organization monitor emerging regulatory considerations?
Has management given proper consideration to the global nature of cryptocurrencies?
Is management aware of the tax framework and implications?
Is the company prepared for unforeseen exposure to cryptocurrencies?
Has management considered the technology and security concerns for cryptocurrencies?



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