Risk and opportunity as digital assets gain ground
As business models shift and regulations adapt, boards will need to understand the opportunities and risks posed by the use of digital assets.
Building on the blockchain technology that enables Bitcoin and other cryptocurrencies, financial technology firms are piloting and deploying more mainstream uses for a broad array of digital assets, setting into motion a fundamental reshaping of payment networks, financial products, asset markets, and more. With regulatory regimes quickly adapting—to both establish frameworks and build guardrails for the use of digital assets within existing financial systems—boards will need to understand the opportunities and risks posed by the use (or non-use) of digital assets.
Collectively, digital assets include cryptocurrencies such as Bitcoin and Ethereum; stablecoins, which are pegged to the price of specific currencies or commodities; and tokenized real-world assets, digital proof of ownership for tangible and intangible assets such as bank deposits, mutual funds, equities, loans and other forms of credit, real estate, and other real property (art, cars, etc.) Digital assets can be traded on an exchange or peer-to-peer on a blockchain, an immutable and decentralized digital ledger on which transactions are validated by a computer network.
$308 Billion
Stablecoin supply pegged to US dollar
Source: Artemis Analytics as of January 12, 2026.
Even as momentum and interest have grown, financial and operational risks have discouraged or delayed many companies from engaging meaningfully with digital assets. While cryptocurrencies gain value in the utility they provide—enabling transactions, securing networks, powering applications—they remain highly volatile, attracting both speculative interest and skepticism about their intrinsic value and stability. Even stablecoins, which primarily hold and disclose hard asset financial reserves to maintain a peg to currencies such as the US dollar or Euro, can fluctuate. Crypto exchanges, where most digital assets transactions occur, are frequent targets for hackers. And self-custody of digital assets, which some view as more secure, can also be more complicated than using a third-party exchange.
In light of these challenges and concerns—and with banks, securities exchanges, payment networks, and others continuing to move forward with digital asset innovation—governments around the world and international organizations are establishing regulations and disclosure frameworks for current and emerging use cases.
In the US, the “Guiding and Establishing National Innovation for US Stablecoins Act,” or GENIUS Act, established a regulatory framework for stablecoins in July. Additional legislation—the CLARITY Act—is progressing through Congress and seeking to establish a framework for digital assets more broadly. Furthermore, the US Securities and Exchange Commission and the Commodity Futures Trading Commission are looking to harmonize crypto regulation, while the Office of the Comptroller of the Currency has begun approving crypto firms for national trust bank charters.
As laws, regulations, and business models advance, directors can expect to hear more about how digital assets could impact the businesses they oversee. For more on emerging uses of digital assets and the implications for boards, the KPMG BLC spoke with KPMG Digital Asset leaders Anthony Tuths and Robert Sledge.
BLC: Why might companies bring digital assets into their operations?
Robert Sledge: Engaging with digital assets comes down to corporate strategy. This isn’t just a technology question or about a passing interest in blockchain. How does the company want to position itself in the marketplace and the changing landscape? For example, stablecoins are about payments—to vendors, suppliers, and employees, or from customers, investors, lenders, and others. These are business-use cases. Does the company benefit from receiving stablecoins? Does it improve capital efficiency or lower costs? Does this open the business to new or underserved markets? (See Stablecoins: The Bridge Between Traditional Finance and Digital Assets.)
In tokenization, a real estate company might see opportunity in tokenizing shares of properties to gain access to new clients and customers. On the other hand, a manufacturer utilizing a money market fund for cash between pay cycles may not see an immediate advantage from a tokenized product.
BLC: What are the biggest risks in digital assets that the board and audit committee need to assess?
Sledge: There are a few categories of risks that boards should focus on. The first is legal and regulatory risk. While the legal and regulatory picture for many digital asset activities is clearer now than it was a year ago, there are still areas of uncertainty and likely additional legislation and rulemaking to come. Uncertainty does not necessarily mean that the best strategy is to wait and see. Proceeding with the benefit of the best legal and regulatory advice, however, is prudent.
Another category of risk is technology governance. There should be governance structures built around people and systems. Who can transact on behalf of the company? What are potential points of personnel or technological failures? Has the company assessed the risks associated with different blockchains or with smart contracts that automatically execute once certain conditions are met? Is management adequately investing in policies, procedures, and controls?
If the organization is going to have material exposure to digital assets—either on its own or by holding them on behalf of customers—the board needs to understand custody. Is the company managing the assets itself or relying on third parties? Does a third-party custodian have System and Organization Controls reporting? Should there be multiple custodians?
The audit committee should also be aware of the financial reporting, accounting, and tax implications, including internal controls over financial reporting. What risks of material misstatement related to digital assets are relevant to the financial statements? Does the external auditor have the capacity and technical know-how to audit digital assets? For public companies, how does the company ensure that its financial reporting and disclosures, including risk factors and management’s discussion and analysis, appropriately capture any material issues related to digital assets?
BLC: What are the potential implications of digital assets for company operations, particularly within corporate finance and treasury?
Anthony Tuths: The use of stablecoins and tokens could add efficiency to treasury operations and potentially reduce the need and reliance on back- and middle-office personnel for moving money or transferring assets. Before, a company might have held different currencies in different locations around the world. With stablecoins and tokens, the company could operate from a central treasury, transferring money to affiliates and third parties at any time. Unlike traditional funds in which a holder can only redeem or subscribe, tokenized money market funds can be transferred to an affiliate or posted as collateral. This is particularly valuable for financial institutions.
We are also seeing a big push for tokenization of assets that trade clumsily—for example, bank loans or private credit. Tokenization can help to facilitate price discovery and liquidity. But it’s important for management to present the business case on where tokenization can have the greatest impact. It could even become a fiduciary issue: If the company is investing in loans, what are the risks and opportunities of NOT trading and recording these assets on a blockchain? (See Tokenizing alternatives from KPMG LLP & AIMA.)
For digital assets more broadly, there are varying degrees of implementation. If a company wants to accept and/or use stablecoins for payments, the learning curve isn’t particularly steep, though additional controls would need to be established. But the more a company wants to build its business on blockchain technology, the more learning and due diligence is required.
For more insights:
Financial Reporting View: Cryptocurrencies and other digital assets
Key questions for boards to ask:
- What are the challenges and opportunities for the business posed by digital assets, including cryptocurrencies, stablecoins, and tokenization? How might digital assets reshape the industry, customer relationships, and company operations over the long term?
- Does the company have (or need) a digital asset strategy? How could digital assets improve the company’s operational efficiency, transparency, and liquidity?
- What is the company’s risk tolerance related to digital assets? Has the company considered the appropriate governance frameworks to help shape its digital asset policies?
- How robust are internal controls around the use of digital assets, including know your customer, anti-money laundering, and cybersecurity?
- How capable is the company’s financial reporting infrastructure related to digital asset valuations, as well as tax implications? What are the capabilities of the external auditor?
- What disclosure is the company making regarding its digital asset strategy, risks, and governance?
- What are the company’s policies on digital asset custody, including self-custody and third parties?
- How is the company monitoring divergent regulatory frameworks across jurisdictions? Does the company have the necessary infrastructure and personnel for compliance?
The views and opinions expressed herein are those of the interviewees and do not necessarily represent the views and opinions of KPMG LLP.
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