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- Week of Sept. 4, 2023
Welcome to the Inaugural Weekly Axis!
It was a big week in terms of adoption of digital assets. We have big names jumping into payments and stablecoins, tokenization of assets (one of my favorite topics), and of course, an ETF application sighting.II
Highlights from the week
Visa's Crypto Voyage: Why Financial Pros Need to Pack Their Digital Bags
Visa's groundbreaking decision to use US Dollar Coin (USDC) on the Solana blockchain for payment transactions is a game-changer for financial professionals. This move not only legitimizes crypto but also simplifies asset management and payments for clients.
Advisors and CPAs must brace for a future where clients increasingly hold assets in digital wallets and make transactions in crypto. Businesses accepting Visa can now effortlessly accept USDC, potentially leading to payroll in crypto. Moreover, the increased use of Solana could drive up the value of its native token, SOL, offering new investment opportunities.
FASB's Crypto Clarity: The New Ledger in Town for Corporate Valuations
The U.S. Accounting Standards Board (FASB) has greenlit fair value accounting for crypto assets on corporate balance sheets. This pivotal move allows corporations like MicroStrategy and Tesla to mark-to-market their crypto holdings, reflecting real-time value changes. Previously, unclear accounting rules deterred companies from holding crypto.
For financial advisors and CPAs, this development is crucial. It necessitates a reevaluation of corporate valuations that include crypto assets and could potentially drive up Bitcoin prices as more corporations adopt it. Understanding these new accounting rules is now imperative for advising clients effectively.
Korea's Mirae & Polygon: The New Dynamic Duo in Asset Tokenization
Mirae Asset Securities, a financial behemoth in Korea, is partnering with Polygon to tokenize assets. This international development is a significant nod to the growing trend of asset tokenization, which is already endorsed by industry leaders like BlackRock and JP Morgan.
For financial advisors and CPAs, this means preparing for a future where clients increasingly hold tokenized assets. These assets offer the benefits of blockchain technology, such as transparency and instant settlement. The move could also boost demand for Polygon's native token, MATIC, offering another investment angle.
ARK's ETH ETF: The Next Frontier in Crypto or Just Another FOMO Fuel?
ARK Investments and 21Shares have filed for an Ethereum (ETH) spot ETF, hot on the heels of ongoing discussions about Bitcoin spot ETFs. If approved, this could be a watershed moment for Ethereum and the broader crypto market.
For financial professionals, this development is another sign that traditional and digital assets are converging. An ETH spot ETF would make it easier for clients to invest in Ethereum, potentially driving up its price and fueling further interest in crypto. Advisors and CPAs will need to educate clients on the pros and cons of holding crypto in ETFs versus digital wallets.
Tyrone Ross and Morningstar Bringing Crypto Visibility to ByAllAccounts
And importantly, our friend Tyrone Ross and Turnqey made a big announcement. Morningstar will start offering advisors the ability to view clients’ crypto assets and wallets, using Turnqey’s API platform.
This will usher in the era of financial advisors having visibility into all of a clients’ holdings, onchain or offchain. Couple this with the news and analysis above regarding stablecoin use and tokenized assets, and we see the value of viewing and advising on all assets in a clients’ portfolio.