May 19, 2020

The rise of Bitcoin

target
virtual currency
currency
silk road
Bizclik Editor
3 min
The rise of Bitcoin

Written by Jeremy Page

 

Despite the fact that many governments throughout the world refuse to acknowledge Bitcoin as a proper form of currency, even China going so far as to ban it altogether, a number of economists are urging such detractors and unbelievers to reconsider. 

If the world's nations refuse to lend Bitcoin legitimacy, they say, it will likely be used exclusively in the black market to fund illegal gun transactions and illicit drug purchases. In that capacity, it could also fall into the hands of money launderers and terrorists, they added.

The virtual currency rocketed in value to $10 per unit at the beginning of 2013 to upwards of $800 in mid-December, making Forbes acknowledge the news as the 'Bitcoin Boom'

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Governments such as China's fear that Bitcoin, which is generated through complex computer code, will undermine its own central bank, wreaking havoc on the international economy and their own. Even the media is getting in on the act, with the New York Post publishing a recent editorial in which it refers to Bitcoin as a high-tech "Ponzi scheme." 

Satoshi Nakamoto, a mathematician, founded Bitcoin in 2009. His system hinged on their being a limited number of Bitcoins available. However, Nakamoto left the project in 2010, and those who are still involved do not hold the power to ensure that the currency remains limited, as it is now in the hands of the international public. 

Bitcoin's reputation suffered a blow in October when the Federal Bureau of Investigation shut down online illegal drug trade site, Silk Road, which relied on Bitcoin as its primary currency. However, Silk Road did more to publicize Bitcoin than any other single entity. 

Even so, Bitcoin gains more fans and more credibility daily, with investors such as Tyler and Cameron Winklevoss, the twins and Harvard graduates who fought Mark Zuckerman in court over rights to Facebook, sinking significant funds into the currency.

One of the Channel Islands is in conversation with the Royal Mint about minting actual physical Bitcoins in order to make the virtual currency a little less virtual. 

Those tracking the rise of Bitcoin say JP Morgan's recent filing of a patent for an electronic currency of its own is testimony to the power of Bitcoin. If an investment bank as large as JP Morgan is acknowledging that Bitcoin is making an impact, they note, the virtual currency is well on its way to mainstream acceptance. Other leading credit card merchants have expressed interest in owning electronic currency patents as well, making it an inevitable in the future of global currency.  

Many retailers and food vendors are beginning to accept Bitcoin for their goods. These include Target, the United States' third-largest retailer. 

The New York Times and London Telegraph recently acknowledged the growth of Bitcoin as an apparent irreversible economic force. Motley Fool, meanwhile, predicted Bitcoin will gain acceptance by several governments, more merchants and more consumers, cementing its existence as a currency in the modern world.

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Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Tax
Compliance
financeleaders
Deloitte
Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

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