Bitcoin’s Mainstream Adoption Accelerates with Accounting Rules

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Bitcoin’s Mainstream Adoption Accelerates with Accounting Rules
  • FASB has announced fair value accounting rules for Bitcoin, Ethereum, and other crypto.
  • MicroStrategy Founder Michael Saylor claims this would improve corporate BTC approval.
  • The new rules would need companies holding crypto to declare their holdings at a fair value.

US accounting standard-setters voted for accounting rules for Bitcoin, Ethereum, and major cryptocurrencies, as reported by Bloomberg on September 6. MicroStrategy founder Michael Saylor celebrated this news on Twitter while claiming that Financial Accounting Standards Board (FASB) accounting rules, enabling fair value accounting for Bitcoin, will eliminate barriers that discourage corporations from adopting BTC as a treasury asset.

Saylor is not alone in expressing this sentiment. Many users have made positive remarks about the accounting rules. According to one such Bitcoin enthusiast, fair value accounting drives the “natural evolution of antiquated financial system to accept Bitcoin.” Accounting software company Cryptio’s head of accounting strategy, Jeff Rundlet also agreed and quoted:

It’s a great step forward for the entire crypto market. I think it’s a great step toward mainstream adoption. I can see finalizing this proposal to help large corporations that are maybe scared to hold crypto on their balance sheet because they’re scared of the technical complexities.

The new set of regulations that are set to go live in 2025 will require companies holding digital assets to disclose their investment at a fair value, in order to accurately reflect an asset’s current worth. Companies and accountants have consistently informed the Financial Accounting Standards Board over several months that the ability to record value recoveries will represent an enhancement compared to the current practices, despite fluctuations in the financial earnings.

In May, MicroStrategy’s CFO, Andrew Kang, responded to FASB’s original proposal by stating that fair-value crypto reporting would enable them to provide investors with a more relevant view of their financial position and the economic value of their Bitcoin holdings, citing that this would result in informed investment and capital allocation decisions.