Blockchain and Bitcoin are two of the hottest words in the financial market today. While the complex algorithms and distributed ledger behind them may be a bit hard to understand, it is not hard to see the large number of benefits that these technologies have the potential of providing to operations and the world. Corporations are noticing their potential as well, which is evidenced in a recent audit conducted by KPMG. The audit revealed that the blockchain industry is booming in the United States.
In KPMG’s “Pulse of Fintech 2018” Report, they stated that venture capital investments in US-based blockchain companies in the first half of this year have already exceeded the total investment amount in 2017. In the report, KPMG U.S.’s Financial Services Digital and Fintech Lead Safwan Zaheer stated:
“there’s more VC [venture capital] flow available than opportunities to invest – a sign of tremendous growth in the space.”
In large part, the numbers for the increase in venture capital can be accredited to two successful funding rounds achieved by R3 and Circle Internet Finance. R3, a consortium startup, raised more than $107 million in funding, and Circle Internet Finance raised more than $110 million.
While these two sums of funding are large contributors to the overall growth in blockchain investing, there are a number of factors that contributed to this trend as a whole. As mentioned previously, there is quite a large number of assets available to invest. In addition, the success of blockchain is growing and developing. The technology is becoming more and more applicable as a way to increase efficiencies in many corporations. Specifically, the rise in blockchain use can be largely attributed to the increased research and uses in some of the countries largest financial institutions, such as Wells Fargo.
An excerpt from KPMG’s report sums that up well: “Blockchain’s capabilities extend from record-keeping and the registration of transactions to document management and supply chain management. While it has primarily been looked at for my banking and insurance point-of-view today, the reality is blockchain opportunities abound and could enhance the process for any number of US and global businesses.”
Before the report came out, KPMG put its own faith and resources in blockchain in two key ways. First, KPMG has been growing there own research on the potential applications of the technology and are compiling data on other successes and uses of the distributed ledger technology. Secondly, they joined a trail project regarding a blockchain service. In this trial, KMPG is working with three other major auditors in the United States, as well as with 20 banks in Taiwan. As a whole, the group of 24 entities is working to see how successfully blockchain can be used in the application of auditing financial records, specifically a public companies’ financial reports. It appears that the end goal of this endeavor, and their research and resources into blockchain in general, is to help alleviate or mitigate the high cost of regulation which exists in the current corporate environment.