Notice: This document is currently under active development and is in draft form. Content is subject to change as the project evolves. Please check back for updates.
Developing a Bitcoin Global Competency Framework for Accountants with incremental, contextualized learning, supporting the creation of targeted microcredentials.
Here’s the complete Global Competency Framework adapted for members of professional accounting bodies, contextualized for acquiring and applying relevant Bitcoin knowledge and principles, including its underlying technologies where relevant:
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To embed Bitcoin education within the accounting industry’s Global Competency Frameworks, aligning with the International Education Standards (IES) to ensure accountants gain the necessary knowledge, technical competence, skills, and ethical understanding to integrate Bitcoin into their professional roles.
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To equip accountants with the competencies needed to apply Bitcoin principles in their practice, and to handle evolving challenges through Continuous Professional Development.
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To future-proof small-to-medium-sized public accounting practices, enabling them to adapt to decentralized, borderless digital economies and remain relevant as the internet and financial systems evolve.
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Members of professional accounting bodies such as the AICPA, CPA Canada, ICAEW, ACCA, ICAI, IFA, IPA, CPA Australia, CA ANZ, and SAICA, along with their counterparts in other nations.
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The focus is on public accountants, particularly those in small-to-medium-sized practices, including those who are expanding their service models to incorporate financial management and business advisory.
This also includes:
- Educators preparing accountants for these roles,
- Employers supporting their development,
- Technology providers who equip the industry with essential tools and innovations,
- Professional bodies that set ethical and practice standards, and
- Regulators that establish and enforce laws and regulations applicable to accountants in professional practice.
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Technical Competence: Integrating comprehensive knowledge of Bitcoin—what it is, how it works, and the global problems it addresses—into modern accounting practices.
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Professional Skills: Developing the skills necessary to navigate decentralized finance and digital assets by accurately and effectively managing and reporting on Bitcoin-related transactions.
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Professional Values, Ethics, and Attitudes: Upholding the ethical responsibility to thoroughly understand Bitcoin and its implications, recognizing its role in addressing global challenges, and ensuring that this knowledge guides ethical considerations in all Bitcoin-related practices.
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Practical Experience: Providing opportunities for hands-on experience with Bitcoin, reinforcing theoretical knowledge through the competent management of real-world applications.
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Continuous Learning: Encouraging ongoing education to stay informed about Bitcoin’s developments, its growing impact on financial systems, and its increasing relevance to professional practice.
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Assessment: Establishing standards for assessing competence in Bitcoin-related knowledge and practices, both during initial qualification and throughout an accountant’s professional career.
- Fundamental knowledge, skills, and values essential for all accounting professionals, with a focus on how these core competencies are specifically applied in the context of Bitcoin.
- Specific expertise required for various areas of practice within Bitcoin-focused accounting.
- Behavioral, ethical, and interpersonal attributes essential for all accounting professionals, emphasizing how these competencies are specifically applied in the context of Bitcoin.
- Skills necessary for leadership, strategic management, and effective collaboration in the context of Bitcoin.
- Recognizing that Bitcoin’s principles—transparency, accountability, security, decentralization, immutability, permissionlessness, trustlessness, and financial sovereignty—align with the ethical standards of the accounting profession.
- Upholding these principles and achieving competency in Bitcoin is an ethical obligation, essential for maintaining public trust and reinforcing our role as stewards of public trust in a decentralized financial ecosystem.
- Applying critical thinking and sound judgment in Bitcoin transactions and when evaluating applications where Bitcoin is held or used. These applications span a spectrum from centralized to decentralized, with varying degrees of custody and permission, requiring an assessment of associated risks and trust assumptions.
- Accountants have the responsibility to directly verify transactions and the on-chain state, without relying on third parties, to ensure accuracy and integrity.
- Mastering the language of Bitcoin to effectively explain its concepts and implications within accounting systems and processes, financial reporting, taxation, compliance, ownership and property rights, trading and finance activities, and other relevant areas.
- This includes translating complex Bitcoin-related information into clear, understandable terms tailored to various stakeholders, thereby bridging knowledge gaps and building trust.
- Applying critical thinking and analytical skills to assess Bitcoin-related financial data, identify discrepancies, and address challenges unique to the entire network of technologies, participants, and processes that make up the Bitcoin network and its associated infrastructure.
- This involves evaluating the suitability of custodial solutions, including multisignature (multisig) wallets, and ensuring the secure management of private keys.
- Accountants must also design and implement internal controls that effectively manage risks while utilizing the inherent advantages of Bitcoin’s design—specifically its decentralization and immutability—in a way that benefits accounting practices and ensures the integrity of financial data, leading to accurate financial reporting, proper disclosures and compliance with relevant standards.
- Understanding how Bitcoin’s decentralized and immutable nature impacts business operations, strategic planning, and the broader economy. It includes navigating the use of Bitcoin as a store of value within treasury management, helping businesses protect against inflation and currency devaluation.
- Regarding the application of Bitcoin Layer 2 solutions for payments, lending, borrowing, and smart contracts, as well as the integration of programmable Bitcoin within AI-driven applications.
- By navigating these areas, businesses can effectively manage their Bitcoin holdings and capitalize on the opportunities within the evolving Bitcoin ecosystem, while making informed decisions that align with their strategies.
- This competency involves accurately reporting Bitcoin assets under applicable financial reporting standards (e.g., IFRS, GAAP), including proper recognition, measurement, and disclosure of Bitcoin-related transactions.
- Beyond applying existing standards, it includes engaging in collaboration and consultation with peers and other professionals to contribute to the development of new reporting frameworks that address the unique challenges of Bitcoin and other digital assets.
- Collaborative efforts within the profession to develop standardized digital asset financial reporting practices that are consistent across all jurisdictions. By working towards global alignment, the goal is to create a unified and comprehensive approach to understanding an entity’s financial health, particularly in the context of multi-jurisdictional enterprises and network-based business models within the digital asset ecosystem.
- Applying audit standards effectively within the decentralized and evolving Bitcoin environment, considering the unique challenges of auditing digital assets.
- Conducting audits that address complexities in verifying ownership in a pseudonymous system, managing valuation volatility, and ensuring regulatory compliance.
- Understanding decentralized ledgers, verifying transaction integrity with blockchain analysis tools, while navigating valuation complexities and diverse global regulations.
- Validating on-chain data and underlying assets, interacting with decentralized assurance infrastructures to verify financial information, with contextual insights from LedgerLens and Auditchain case studies within a Bitcoin framework.
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Applying traditional tax concepts to Bitcoin, considering how different tax systems classify and treat it—whether as property, currency, or commodity. This involves analyzing the implications of these varied approaches and anticipating new taxation methods in a decentralized, Bitcoin-based economy.
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The "Bitcoin is not property" private ruling in Australia prompts a deeper examination of Bitcoin's technical properties against property law concepts, which define its tax treatment. Exploring Bitcoin’s integration with other protocols and layer 2 technologies, including its use in smart contracts, decentralized applications, and DeFi, raises important questions about the suitability of traditional property-based taxation.
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This competency emphasizes staying informed about technological advances and working with regulators to develop guidelines that reflect Bitcoin’s unique characteristics and expanding use cases. It also involves exploring the role of tax professionals as advocates for taxpayers and innovation economies, collaborating with and influencing lawmakers to drive essential tax reforms.
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Developing budgets, forecasts, and cost analyses that incorporate Bitcoin into business operations; using real-time data and blockchain analytics for accurate financial modeling.
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Recognizing Bitcoin’s impact on treasury management, including enhanced transparency, reduced counterparty risk, efficient cross-border transactions, effective liquidity management, and the need for updated cybersecurity measures and reporting metrics.
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Incorporating Bitcoin into long-term financial planning by evaluating its role in asset diversification and capital allocation, while staying informed on its integration with smart contracts and decentralized applications and their potential impact on future financial outcomes.
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Conducting cost analysis in Bitcoin mining, focusing on budgeting for energy consumption, hardware depreciation, and operational efficiency, while considering the effects of mining difficulty, halving events, and opportunity costs compared to other investments.
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Establishing governance frameworks that adapt traditional models to Bitcoin’s decentralized nature, with clear policies for transparency and accountability, and utilizing Decentralized Autonomous Organizations (DAOs) for stakeholder-driven decision-making.
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Designing risk management strategies for Bitcoin-based businesses and investment structures, assessing the risks associated with both custodial and non-custodial solutions, ensuring operational resilience, and navigating regulatory environments effectively.
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Understanding and incorporating risk management frameworks developed for Bitcoin layers into business strategies. This involves analyzing the trust assumptions and third-party risks associated with sidechains, state channels, and other layers, and integrating these insights into business risk management practices for secure and effective use of Bitcoin across various operational contexts.
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Developing effective internal controls to safeguard Bitcoin assets, including multi-signature wallets, strict access controls, and regular audits to ensure compliance with legal requirements and maintain operational integrity.
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Identifying and reporting on Environmental, Social, and Governance (ESG) factors in Bitcoin-related activities, particularly in mining, which increasingly uses renewable energy solutions, and highlighting Bitcoin’s role in driving the adoption and funding of renewable energy infrastructure.
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Leveraging Bitcoin’s open and permissionless network to expand financial access and support local economies, establish circular economies that connect local initiatives with global networks, and support socially important activities like farm-to-plate distribution, all while aligning these efforts with social ESG objectives.
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Applying Bitcoin’s inherent governance features, such as decentralization, transparency through the public ledger, and community-driven decision-making, to business practices in a way that aligns with ESG principles and supports effective governance.
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- Commitment to ongoing education and staying informed about the Bitcoin ecosystem and Bitcoin's impacts on various sectors and the broader economy, including regulatory changes and market developments.
- Leading and collaborating effectively in projects and initiatives that involve Bitcoin, fostering innovation and co-creating successful outcomes.
- Building and maintaining strong relationships with Bitcoin-focused organizations and clients who use or are interested in Bitcoin, providing them with advocacy, informed advice and solutions.
- Recognizing and appreciating the borderless nature of Bitcoin, understanding its diverse cultural and socio-economic impacts, and applying this awareness in a professional setting.
🚧 (Under Development)
- Developing and implementing strategies that leverage Bitcoin to achieve long-term organizational goals.
- Leading and managing organizational changes related to the adoption of Bitcoin, ensuring smooth transitions and the alignment of business objectives with Bitcoin’s potential benefits.
- Making informed decisions regarding the use of Bitcoin in business operations, considering both opportunities and risks.
- Managing and developing talent within organizations that engage with Bitcoin, ensuring that team members are equipped with the necessary skills and knowledge.
🚧 (Under Development)
- Designing CPE programs including microcredentials that align with this framework, ensuring that professionals are adequately trained in Bitcoin-related competencies.
- Utilizing this framework as a benchmark for accreditation, licensing, and ongoing professional development related to Bitcoin.
- Applying the framework to assess and develop the competencies of accounting professionals within organizations that interact with Bitcoin.
- Integrating this framework into accounting curricula, preparing students and professionals to navigate and apply Bitcoin knowledge in their careers.
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- Ensuring that accounting professionals develop both the technical and professional skills necessary to effectively participate and lead in a Bitcoin-based economy.
- Promoting consistent standards for Bitcoin-related competencies across the global accounting profession.
- Adapting the framework to incorporate future developments in the Bitcoin ecosystem and regulatory environment, ensuring that professionals are well-prepared and relevant for a decentralized financial and commercial landscape.
🚧 (Under Development)