KPMG. one of the ‘Big Four’ accounting firms, released a report back on November 15, 2018, saying that the firm is focused on helping organizations build the infrastructure and
capabilities required to scale crypto. While bullish on the nascent industry, the company does make the claim that institutional investors need to join the picture in order to grow.
KPMG’s report, “Institutionalization of Cryptoassets”, addresses the current global financial system and the challenges faced by nations unable to access the market. The report also explains how countries experiencing hyperinflation can use the globally accessible, decentralized store of value to stabilize its economy. However, to get cryptos where they need to be in order to ease these situations, institutional investors are needed to build the market.
The report stated:
“Cryptoassets have potential. But for them to realize this potential, institutionalization is needed. Institutionalization is the at-scale participation in the crypto market of banks, broker dealers, exchanges, payment providers, fintechs, and other entities in the global financial services ecosystem. We believe this is a necessary next step for crypto to create trust and scale.”
Despite a bear market plummeting crypto prices since December 2017, institutional investors have already started making their moves into the industry. Crypto-based firms have also been releasing enterprise grade products to draw in the major players. Financial institutions have already begun opening up crypto-based divisions, such Fidelity, the $2.5 trillion asset manager, launching Fidelity Digital Assets. The new enterprise will initially offer custody solutions for Bitcoin and Ethereum coins.
KPMG’s reports states:
“In 2018, we are seeing a wave of new entrants in the market such as security token platforms, stablecoins, and even established financial services institutions that are launching crypto products and services. Cryptoassets are now impossible to ignore.”