The audit, tax and advisory firm says cryptocurrencies are a "maturing asset class" that can no longer be ignored.
Institutional adoption in cryptocurrencies appears to be picking up again, with KPMG in Canada announcing that it has added Bitcoin and Ether to its corporate treasury.
The audit, tax and advisory firm said this is the first time it has directly invested in digital assets — and it confirmed that carbon offsets are also being purchased to ensure the transaction is net zero and in line with its environmental, social and governance commitments.
KPMG Canada executive Benjie Thomas described cryptoassets as a "maturing asset class" that is increasingly becoming attractive to hedge funds, insurers and pension funds — and traditional financial institutions including banks are continuing to add support for cryptocurrencies. He added:
"This investment reflects our belief that institutional adoption of cryptoassets and blockchain technology will continue to grow and become a regular part of the asset mix."
A "rigorous risk assessment process" was performed before the transaction was completed to determine the "regulatory, reputational and custodial risk" associated with gaining exposure to digital assets — along with the tax and accounting implications.
KPMG Canada's advisory partner, Kareem Sadek, said the opportunity presented by cryptocurrencies "needs to be considered by financial services and institutional investors," adding:
"We've invested in a strong cryptoassets practice and we will continue to enhance and build on our capabilities across decentralized finance, non-fungible tokens and the metaverse to name a few. We expect to see a lot of growth in these areas in the years to come."
The acquisition was made using Gemini.
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Why Now?
Bitcoin is currently trading 36% below the all-time high of $68,789 that was set in November 2021 — meaning that the current price could be a good entry point for KPMG.
Speaking to Bloomberg, the firm said that the experience of acquiring digital assets was a valuable one — not least because this means it can "guide clients and prospective clients through the process of cryptoasset treasury allocation." An email sent to the publication added:
"Our investment allows us to share our journey, our experiences, our challenges with them so that we can help them navigate the cryptoasset world."
The stomach-churning volatility of cryptocurrencies has meant that many companies have been reluctant to take the plunge — even as inflation surges in major economies, eroding the value of flagship currencies including the U.S. dollar and the British pound.
MicroStrategy — the business intelligence firm led by Michael Saylor — was an early mover, and began adding BTC to its balance sheet back in August 2020. It now owns more than 125,000 BTC and is currently sitting on paper profits of $1.7 billion.
The company has been encouraging others to follow its example, holding livestreams that enable businesses to learn more about how the asset class works.
