Speaker 1: Anytime you're holding what this guidance defines as a crypto asset,
Speaker 1: So this excludes NFTs. I will caveat with that for
Speaker 1: any crypto assets held on the balance sheet recorded at
Speaker 1: fair value. So as of the date of my you know,
Speaker 1: the end of the quarter, I should say what is
Speaker 1: the price and what is the quantity of my bitcoin held,
Speaker 1: and that is the number that I will record it
Speaker 1: on my balance sheet.
Speaker 2: This content is brought to you by Uphold, which is
Speaker 2: one of the top crypto platforms out there which allows
Speaker 2: you to easily buy, sell, trade bitcoin and the top
Speaker 2: all coins in the market. Uphold lists two hundred and
Speaker 2: sixty plus cryptocurrencies. They also allow you to trade precious
Speaker 2: metals such as gold, silver, palladium, and platinum. I've been
Speaker 2: a user of Uphold since twenty eighteen, so I can
Speaker 2: vouch it this platform. They have full transparency reports and
Speaker 2: they don't commingle or lend out your funds. They also
Speaker 2: have a great product called Vault, which is an assisted
Speaker 2: self custody product. A vault allows you to maintain custody
Speaker 2: of your funds and the keys are split, so Uphold
Speaker 2: holds one and you hold two, and if there's any
Speaker 2: issues if you lose one of your keys, Uphold will
Speaker 2: help restore these keys and you can maintain access to
Speaker 2: your funds. It's twenty four to seven instant trading, it's trustless,
Speaker 2: so this is a great feature that can give you
Speaker 2: peace of mind where you don't have to worry about
Speaker 2: if you lose your private keys and much more so.
Speaker 2: If you'd like to learn more about Uphold, please visit
Speaker 2: the link in the description. Welcome into the Thinking Crypto Podcast.
Speaker 2: I'm your host, Tony Edward and with me is Reagan Cook,
Speaker 2: who is the accounting subject matter expert at tax Bit. Reagan.
Speaker 2: Great to have you back on.
Speaker 3: Yeah, thanks for having me, Reagan.
Speaker 2: I have interviewed folks on tax from taxbit over the years,
Speaker 2: and we've talked a lot about what tax that has
Speaker 2: been doing to help different companies and even retail investors
Speaker 2: in the crypto industry. So definitely want to hear the
Speaker 2: latest updates, but also get your take on things like
Speaker 2: what the IRS is doing and the FASTB rules and
Speaker 2: so forth around companies holding bitcoin and so forth. But
Speaker 2: let's start with your background. Where are you from and
Speaker 2: what's your professional background?
Speaker 1: Yeah, thanks for asking I'm from Indiana. I grew up
Speaker 1: a Hoosier, went to Indiana University. I'm a CPA by trade.
Speaker 1: I started my career at Deloit, spent some time at
Speaker 1: a large public company thereafter, doing all things internal and
Speaker 1: external reporting. I had a personal interest in crypto and
Speaker 1: moved out west and found tech Bit, which was a
Speaker 1: perfect combination of that professional background in financial reporting and CPA,
Speaker 1: but also paired with personal interest of crypto and blockchain technology.
Speaker 2: So what sparked your personal interest? What was your first
Speaker 2: encounter and what was your aha moment?
Speaker 1: My aha moment was really understanding and watching a bunch
Speaker 1: of YouTube about blockchain technology. This had to be about
Speaker 1: ten years ago. Actually, I started watching a bunch of
Speaker 1: YouTube reading about blockchain technology, understanding some of the efficiencies.
Speaker 3: And utility there. So that was actually the inception of
Speaker 3: the interest.
Speaker 1: And then you know, of course there was a ton
Speaker 1: of a ton of activity going on with bitcoin. I
Speaker 1: started hearing about people mining bitcoin. I'm also a freelance artist,
Speaker 1: and so the NFT space was particularly interesting for me,
Speaker 1: and you know, the thought of the use cases just
Speaker 1: I it piqued my interest and it's cool, it's exciting
Speaker 1: to see how the industry has evolved since then, and
Speaker 1: it will continue to evolve. And it's just fascinating to
Speaker 1: see companies like PayPal and Visa and even Nike a
Speaker 1: few years back exploring the NFT space. You know, it's
Speaker 1: evolving and it will continue to evolve, but it's just
Speaker 1: fascinating to see these use cases start to actually play out.
Speaker 2: So, yeah, absolutely, and what many will call now Web three,
Speaker 2: the transition from Web one to two point zero course,
Speaker 2: and now an entirely different world where users kind of
Speaker 2: have more ownership and the ability to do a lot more. Now,
Speaker 2: for those who may not know about tax bit, give
Speaker 2: us an overview of your services.
Speaker 3: Yeah.
Speaker 1: So Taxbit's mission is to enable the digital economy. And
Speaker 1: that's a broad statement. But I start there with that
Speaker 1: broad statement because tax bit has built, you know, modernized
Speaker 1: solutions for tax accounting and also public sector So if
Speaker 1: let's drill into each of those really quickly.
Speaker 3: Here, accounting.
Speaker 1: When I say accounting, I'm referring to accounting and financial
Speaker 1: reporting and all of the tracking that needs to happen
Speaker 1: for the individual transactions to do that consolidated financial reporting
Speaker 1: whether you're a public or a private company, and along
Speaker 1: with that is the concept of journal entries. So if
Speaker 1: you think about legacy ERP solutions, you know, NetSuite, quick books,
Speaker 1: some of these solutions that have been around for a
Speaker 1: long time that most companies use regardless of their size,
Speaker 1: they don't traditional or they don't historically support digital assets,
Speaker 1: and so there's a need for this external solution because
Speaker 1: it's putting accountants and finance x or it's back in
Speaker 1: spreadsheets completely. So these experts in their roles as a
Speaker 1: controller or a CFO or you know, their respective teams,
Speaker 1: they've taken steps back and are now doing everything in spreadsheets.
Speaker 1: And so there's a need for you know, either the
Speaker 1: existing ERP solutions or solutions like ours to enable companies
Speaker 1: to continue to explore the digital asset space and be
Speaker 1: efficient while doing it from a back office perspective. And
Speaker 1: that also relates to our tax solutions.
Speaker 3: So if you think.
Speaker 1: About the recent you know, regulation clarity that we're seeing,
Speaker 1: it's the same concept. There's a ton of underlying transaction
Speaker 1: data that companies need to track and record in a
Speaker 1: timely manner to comply with this regulatory clarity that we're
Speaker 1: starting just now starting to see. And then Finally, we
Speaker 1: have a public sector side of the house, so we
Speaker 1: build tos for government agencies to do the same exact thing.
Speaker 1: So we're enabling you know, whatever groups of people, enterprises,
Speaker 1: government agencies to do their tax in accounting and whatever
Speaker 1: their respective reporting requirements are in a more you know,
Speaker 1: efficient manner.
Speaker 2: So speaking of government agencies, of course, the i r
Speaker 2: S is the agency where everybody's focused on and what
Speaker 2: activities they have going on when initiatives. How have you
Speaker 2: been engaging with them and are there any interesting takeaways?
Speaker 3: Yeah, in terms of the I r S.
Speaker 1: So i'll speak high level here, we've been you know,
Speaker 1: we have been working close with the i r S.
Speaker 1: We have a contract with the i r S. We
Speaker 1: work closely with the i r S. We have built
Speaker 1: solutions for different government agencies. They are building out their team.
Speaker 1: This has become public information. You know, we have an
Speaker 1: individual that came from the IRS. The person that hired
Speaker 1: me at tax Bit recently joined the IRS. So we
Speaker 1: are you know, we work closely with them in the
Speaker 1: sense that more from a thought leadership perspective, and we're
Speaker 1: enabling the IRS and other government agencies with solutions so
Speaker 1: that they can understand the space better and make informed
Speaker 1: decisions for the broader population.
Speaker 2: Yeah. That's really great because I know there's been a
Speaker 2: lot of rumblings in the industry from people saying these
Speaker 2: government agencies don't get it right, and it's any education
Speaker 2: and advocacy. So it's great that you guys are engaging
Speaker 2: and helping them along the way because there's been things
Speaker 2: like the ten ninety nine DA form I believe issued
Speaker 2: by the IRS, with the industry saying hey, it's not dual.
Speaker 3: Yeah.
Speaker 2: Yeah, So any thoughts on that form and how the
Speaker 2: industry has been engaging.
Speaker 1: No, I mean, whether it's that form or you know,
Speaker 1: an accounting topic or other forms that have been discussed,
Speaker 1: it's it's a matter of educating, educating the decision makers
Speaker 1: and helping them understand so that we can create realistic
Speaker 1: and actually useful requirements for companies and individuals. So that's
Speaker 1: where I do believe there's been a ton of interesting conversation,
Speaker 1: and you know, I'm extremely passionate about what tax bit
Speaker 1: is doing because I literally I was on a call
Speaker 1: yesterday where we were having conversations with someone at a
Speaker 1: large exchange and it was simply a thought leadership conversation
Speaker 1: that happened and after the bitcoint Nashville conference. And it's
Speaker 1: funny they were referring to this conversation as extra curricular work.
Speaker 1: You know, you have your your work that you're doing
Speaker 1: at your respective company, and it's really cool to see
Speaker 1: all these individuals come together outside of their you know,
Speaker 1: direct roles and responsibilities at their companies, coming together and
Speaker 1: you know, partnering and wanting to learn with.
Speaker 3: Each other about what should.
Speaker 1: The regulation be, what should the guidance be for accounting,
Speaker 1: what is realistic for individual taxpayers and also companies wanting
Speaker 1: to explore and grow.
Speaker 3: In the digital asset space.
Speaker 1: So we are so actively involved in these conversations on
Speaker 1: a weekly basis, and that's certainly one element of what
Speaker 1: keeps me extremely energized and also excited about the future
Speaker 1: for this space.
Speaker 2: Yeah. Absolutely, and I think as with you, you know,
Speaker 2: you guys doing your advocacy and education the industry, continuing
Speaker 2: to give feedback. We can get get this right, and
Speaker 2: the government's different government agencies can get these things right.
Speaker 2: I did want to ask you about the FASTB rules,
Speaker 2: which are enforceable starting December thirty, first, twenty twenty four,
Speaker 2: and this is part of a bigger conversation of companies
Speaker 2: adding bitcoin to their treasury, you know, and using it
Speaker 2: as a treasury reserve asset. Tell us about this rule,
Speaker 2: and I believe from what I've read, but you can
Speaker 2: correct me if I'm wrong that this is positive because
Speaker 2: it allows companies to easily at biitcoin to their balance sheet.
Speaker 3: Yeah. Absolutely.
Speaker 1: If you had asked me three years ago if I
Speaker 1: would get fired up about accounting guidance, I would have
Speaker 1: said no. But there is one thing that I do
Speaker 1: get very excited about in the realm of accounting guidance,
Speaker 1: and it is this specific topic because previous to this
Speaker 1: accounting guidance update, the guidance and requirement for companies.
Speaker 3: I'll just simplify here the previous guidance. Here. If you were.
Speaker 1: Holding bitcoin and you bought it for fifty thousand dollars,
Speaker 1: let's say, and the price dropped to twenty thousand, and
Speaker 1: then it went back up to sixty thousand, you were
Speaker 1: required as a company to record that initial at any
Speaker 1: loss that occurred. So anytime the price dropped below that
Speaker 1: initial cost basis value, the company was required to record
Speaker 1: an impairment loss and then was not able to record
Speaker 1: that increase in value at any later date until the
Speaker 1: bitcoin was actually disposed of. And so if you were
Speaker 1: to look at micro Strategies balance sheet, for example, and
Speaker 1: their earnings, you would see pretty sizable impairment losses. So
Speaker 1: this was actually not accurate accurately representing the economics of
Speaker 1: the asset held at that time, and it's not there
Speaker 1: shouldn't be incentive to sell the asset to actually record
Speaker 1: and realize that increase in value, So it's not accurately.
Speaker 1: It was not previously accurately reflecting what the economics were
Speaker 1: and what the true value was. And so now the
Speaker 1: guidance is okay anytime you're holding what this guidance defines
Speaker 1: as a crypto asset.
Speaker 3: So this excludes NFTs.
Speaker 1: I will caveat with that for any crypto assets held
Speaker 1: on the balance sheet recorded at fair value. So as
Speaker 1: of the date of my you know, the end of
Speaker 1: the quarter, I should say what is the price and
Speaker 1: what is the quantity of my bitcoin held, and that
Speaker 1: is the number that I will record my balance sheet.
Speaker 1: Any change in value does go through earning still, but
Speaker 1: in an appreciating market or you know, whatever the price
Speaker 1: volatility is the company is you know, now able to
Speaker 1: take ownership and accurately represent what the economics are of
Speaker 1: the assets held.
Speaker 3: So it is intended to.
Speaker 1: Be a lower cost, lower complexity movement for the industry,
Speaker 1: which is really exciting because I think it is beneficial
Speaker 1: to the users of the financial statements and also the
Speaker 1: team doing the back office work. So it's making it
Speaker 1: This is the type of guidance from my perspective, that
Speaker 1: is actually enabling companies to continue to explore and grow
Speaker 1: in the space.
Speaker 2: Yeah, that's really great and the fact that it's making
Speaker 2: less complex easier for both sides. As you mentioned, and
Speaker 2: I know from the macro there's a lot of companies
Speaker 2: looking to do this because of inflation, because of other
Speaker 2: assets not performing as well, and bitcoin has been like
Speaker 2: the top performing asset over the past I leave ten
Speaker 2: to eleven years. So it seems to be like a
Speaker 2: global trend of companies adding bigcoin chair balance ing now
Speaker 2: because we're talking just the United States, but for us
Speaker 2: to remain competitive, it's good that these rules are you know,
Speaker 2: making it easier.
Speaker 3: Yeah.
Speaker 1: Absolutely, And I mean if you even if you think
Speaker 1: about the guidance from a global perspective.
Speaker 3: We are now more in line.
Speaker 1: With what is acceptable you know in Europe and companies
Speaker 1: following IFRS guidance.
Speaker 3: So this is really exciting for the space.
Speaker 1: And you know, not only is it saving companies time, ideally,
Speaker 1: it's it's let's say you've never touched crypto, you don't
Speaker 1: understand it, and you also don't understand accounting specifically. You know,
Speaker 1: there's a reason that we can go and trade stocks
Speaker 1: and look at a ten K if we want to
Speaker 1: to understand the financial health of a company without understanding
Speaker 1: the you know that that accounting guidance might not be
Speaker 1: the most up to date or you know, accurately representing
Speaker 1: what the activity is. It might signal something that is
Speaker 1: not necessarily fair, if you will, to the company holding
Speaker 1: that asset. So this is really encouraging and I think
Speaker 1: over time will continue to see more and more clarity,
Speaker 1: hopefully based off of informed input from industry thought leaders.
Speaker 1: So I think this is all really really exciting stuff.
Speaker 2: I don't know if you can answer is, but I'm
Speaker 2: curious as to have you seen more companies and corporates
Speaker 2: coming to you guys about these things. Given that bitcoin
Speaker 2: and crypto have gone mainstream that you got the ETF launches,
Speaker 2: you've got regulations kind of halfway through the whole legislative process,
Speaker 2: right got out of the FIT twenty one, get out
Speaker 2: of the house. Are you guys seeing more demand and
Speaker 2: more business because of these things?
Speaker 1: Yeah, I would say we're there's a new energy in
Speaker 1: the space right now, and we're even seeing more demand
Speaker 1: from companies that you know, have been in the space
Speaker 1: for a while, and they're coming to us and they're saying,
Speaker 1: you know, you've been on top of this thought leadership
Speaker 1: element and educational you know, perspective coming from an educational lens.
Speaker 1: I think has gone a long way for us because
Speaker 1: we've you know, we've stayed engaged and on top of
Speaker 1: these new regulations and this new guidance, and we've we've
Speaker 1: been building for this for a while, anticipating a lot
Speaker 1: of these changes because we genuinely want you know, we
Speaker 1: want to enable companies, and so it's it's been energizing
Speaker 1: to see companies come to us saying, you know, we've
Speaker 1: seen your thought leadership, We've seen you know, this educational
Speaker 1: content that you're putting out. We want to understand how
Speaker 1: your solutions work now and so it is while we've
Speaker 1: seen more demand, we're also continuing to have conversations with
Speaker 1: you know, large institutions around Okay, you know, we're thinking.
Speaker 3: About these projects. How how can we build with you
Speaker 3: to make sure we're doing this the right way. We
Speaker 3: want to we want to have.
Speaker 1: The right the pipes in place before we take off,
Speaker 1: and that that's also been really exciting to see.
Speaker 2: So key question here does it matter if a company
Speaker 2: adds bitcoin directly to their balance sheet versus if they
Speaker 2: buy the ETF. Let's say they buy black Rocks ETF
Speaker 2: and I don't know, I don't know the intricacies of
Speaker 2: these things and how it all works, but does that matter?
Speaker 1: Yeah, So anyone, any company holding crypto assets will then record.
Speaker 3: That asset held on their balance sheet. So it's the
Speaker 3: simple answer is.
Speaker 2: Yes, got it. And what's on your roadmap for twenty
Speaker 2: twenty four or the remainder of twenty twenty four?
Speaker 1: Yeah, in terms of roadmap, so two things I'll say. One,
Speaker 1: we are expanding from a global perspective. We're growing into
Speaker 1: you know, multiple different areas of the world, specifically Europe, Dubai,
Speaker 1: Latin America. There's an initiative to expand globally on all fronts,
Speaker 1: So not just accounting. I did mention you know, IFRS
Speaker 1: and GAP aligning more closely now, but from you know,
Speaker 1: from a tax form perspective and just from a general
Speaker 1: information reporting perspective. What's happening at tax Bit. And the
Speaker 1: thing that keeps me extremely energized about what the company
Speaker 1: has built and can build is once you once once
Speaker 1: this company tax bit from a software from a solution
Speaker 1: provider perspective, once we have the underlying data and quality
Speaker 1: of calculations for those gay losses, we can put together
Speaker 1: any combination of form or report, and we can expand
Speaker 1: globally from there and also continue to iterate as we
Speaker 1: see more regulatory clarity. So number one is we're expanding internationally.
Speaker 1: And number two what I was alluding to there is
Speaker 1: as we continue to see clarity, whether it's the fast
Speaker 1: be for you know, accounting in the US, or there's
Speaker 1: changes to the international accounting guidance and that landscape, or
Speaker 1: there's updated information reporting requirements for this country, we are
Speaker 1: able to build to those things because we have the
Speaker 1: underlying calculation engine, and we also we have the infrastructure
Speaker 1: as a team to continue to build you know, we
Speaker 1: raised over two hundred million dollars a handful of years ago,
Speaker 1: and we're we're in this for the long haul and
Speaker 1: as much as we can enable the space with modernized solutions,
Speaker 1: will continue.
Speaker 3: To do that.
Speaker 2: Let's talk about the crypto market at large. You know,
Speaker 2: we kind of touched on it earlier with the ETF
Speaker 2: launches Crypto going mainstream, Looking at your thoughts on that,
Speaker 2: and look, even presidential candidates are now suggesting the United
Speaker 2: States at Big One as a treasury reserve asset. It
Speaker 2: seems we're entering a new era of crypto adoption with
Speaker 2: politics integrated and much more.
Speaker 3: Yeah, we are.
Speaker 1: I mean at Bitcoin Nashville alone and in it to
Speaker 1: be fair, it was my first time attending that specific conference.
Speaker 1: I've been to a handful of the other conferences there.
Speaker 1: The political representation blew my mind. And even hearing Michael
Speaker 1: Saylor speak about his outlook on bitcoin not only from
Speaker 1: a corporate adoption perspective, but from a global adoption perspective
Speaker 1: for nations in debt, I mean, it is just fascinating
Speaker 1: to see the intersection here between what you know, a
Speaker 1: few years ago might have been for retail the retail
Speaker 1: use case and now you have people speaking, you have
Speaker 1: presidential candidates and Michael Saylor speaking about the use cases
Speaker 1: for nations and debt. I mean, it is, it is
Speaker 1: truly fascinating.
Speaker 2: So yeah, and then I mean I didn't. I don't
Speaker 2: think people want to see crypto become politicized, but unfortunately
Speaker 2: some people and the government have made it that way
Speaker 2: and as a result, it seems like it's going to
Speaker 2: be an election issue. Certainly not number one, you know,
Speaker 2: for the majority of the nation, but for some people
Speaker 2: it's a single issue item for them, like they're like, hey,
Speaker 2: you're anti crypto, I'm going to vote against you. And
Speaker 2: we're starting to see some of that. And what are
Speaker 2: your thoughts on it becoming this election thing and the
Speaker 2: industries raising campaigns, excuse to me funds to need to
Speaker 2: pro crypto candidates and so forth.
Speaker 3: Yeah, I won't.
Speaker 1: I won't comment too much there because I think, like
Speaker 1: any political topic, it can become polarizing.
Speaker 3: But what I will focus.
Speaker 1: On here is, you know, we are neutral from a
Speaker 1: political standpoint, and our mission is to build solutions to
Speaker 1: enable whatever the regulation is, and you know, keep users
Speaker 1: and institutions informed around what this regulation is. And how
Speaker 1: we can continue to You know, I again, like I said,
Speaker 1: any political topic can get noisy. We are focused on
Speaker 1: enabling companies, individuals, and government agencies with solutions to explore
Speaker 1: these different emerging technologies.
Speaker 2: What are your thoughts on stable coins and tokenization? The
Speaker 2: stable coin market is heating up, and are some of
Speaker 2: your clients stable coin issuers or are some of them
Speaker 2: looking to use stable coins? And what are some of
Speaker 2: the tax implications and so forth.
Speaker 3: Yeah.
Speaker 1: No, I see stable coins having a lasting future as
Speaker 1: it relates to corporate adoption and use case. I mean,
Speaker 1: if you think about payment processing and international transfers, and
Speaker 1: a couple specific examples i'll give here, like Stripe helps
Speaker 1: merchants to accept stable coins and PayPal has launched a
Speaker 1: stable coin. I see this being a lasting use case
Speaker 1: and stable coins fall under that same guidance. You know,
Speaker 1: one thing I'll say about stable coins specifically is at
Speaker 1: the surface, it might seem as if okay, I will
Speaker 1: record this one to one, I can say this is
Speaker 1: worth one dollar and I don't. I don't need to
Speaker 1: track any price volatility here. That was actually my outlook
Speaker 1: for stable coins. And then you think of the FTX
Speaker 1: use case, you still need to track what the actual
Speaker 1: price is because there is a scenario where that price
Speaker 1: still does fluctuate. So same guidance applies to stable coins.
Speaker 1: But we are seeing more and more use cases as
Speaker 1: it relates to stable coins, and I think stable coins
Speaker 1: are actually an extremely approachable entry for you know, people
Speaker 1: who are not as familiar with the cryptos.
Speaker 3: I think you could just I think you.
Speaker 1: Could categorize the different crypto assets in so many different ways.
Speaker 1: So my, you know, my grandma, she might not care
Speaker 1: about having exposure to bitcoin and that price volatility or
Speaker 1: the ether ETF. I think that I heard this comparison
Speaker 1: in a podcast I listened to recently where someone said,
Speaker 1: you know, the bitcoin ETF is more an investment and
Speaker 1: a desire for exposure to that price volatility and that
Speaker 1: actual asset, whereas the eth ETF is more of exposure
Speaker 1: to the underlying technology and the blockchain that will continue
Speaker 1: to build on there. So I think the use cases
Speaker 1: are different, whether it's bitcoin, ethereum, stable coin, and I
Speaker 1: think a stable coin is an extremely approachable way for
Speaker 1: new users.
Speaker 3: To adopt this underlying technology.
Speaker 2: And on that note, you know, with tokenization, and this
Speaker 2: might be too early to have this conversation. But you're
Speaker 2: seeing like black Rock tokenize a fund on the theorem blockchain,
Speaker 2: Are there like any new tax implications or maybe once again,
Speaker 2: we're not there yet. We still have to figure all
Speaker 2: this out. You have to get guidance on the irs
Speaker 2: and so forth.
Speaker 1: No, exactly, I mean, I the number of times I've
Speaker 1: heard the real world assets being tokenized. People want to
Speaker 1: learn about these new concepts, and I that has been
Speaker 1: a hot topic that I continue to hear more and
Speaker 1: more about, and it is an area where we'll continue
Speaker 1: to need regulatory clarity and guidance because if you think
Speaker 1: about any any of these, you know, new concepts. So
Speaker 1: let's say the tokenization of a real world asset, it
Speaker 1: we need to think about the nuances or reporting and
Speaker 1: what does the actual accounting look like for that, And
Speaker 1: those are conversations that we're actively having today. So but
Speaker 1: at the root of it, it's all about the underlying
Speaker 1: transaction data and being able to capture what is the
Speaker 1: value of this asset when I acquire it, when I
Speaker 1: sell it, and then any point in time in between.
Speaker 1: It's the same thing with NFTs. I mean, it's it's
Speaker 1: still a challenge in the space for anyone holding n fts,
Speaker 1: what how do you how do you value what what
Speaker 1: that n f T is worth? There's there's different solutions
Speaker 1: out there. You know what the value is when you
Speaker 1: acquire that n FT, you know what it is when
Speaker 1: you sell it, but how are you measuring that time
Speaker 1: in between? And it's the same thing for for some
Speaker 1: of these other emerging concepts.
Speaker 2: Question where wouldn't the standar Let's say I buy a
Speaker 2: trading card or a comic book. Wouldn't the same rules
Speaker 2: apply because there is volatility in that market and it's
Speaker 2: a collectible and I could be holding it for six
Speaker 2: months or one month and I flip it or whatever
Speaker 2: it is, Right, wouldn't something similar apply to or just
Speaker 2: you know, the offline version of that applied to NFTs.
Speaker 1: Yeah, and so that's where So that's interesting because right
Speaker 1: now in this updated accounting guidance, NFTs are out of
Speaker 1: scope for this fair value accounting guidance. So right now,
Speaker 1: how what Technically? Technically, if you're holding an NFT, you
Speaker 1: are still required to do impairment on that n FT,
Speaker 1: which the implications for that are quite challenging for a company.
Speaker 1: If I, if I buy an NFT, being able to
Speaker 1: track what was the low after I acquired it, even
Speaker 1: though I'm still holding it. That's it like if you're
Speaker 1: holding a comic book that is nearly that's virtually.
Speaker 3: It's pretty much impossible to do.
Speaker 1: And so that is where we we should continue to
Speaker 1: see and we will continue to see, you know, based
Speaker 1: off of demand and use cases really playing out in
Speaker 1: the industry, that guidance will also need to shift because
Speaker 1: that from an operational perspective, that becomes extremely time consuming
Speaker 1: and you know, you also want accurate reporting.
Speaker 3: So it's the same thing.
Speaker 1: I appreciate the analogy there because right now the guidance
Speaker 1: has NFTs scoped out. So as we see, you know,
Speaker 1: if and when and how we see more demand for
Speaker 1: these use cases. I am confident that you know, the
Speaker 1: FASB and these other regulating bodies ease will you know,
Speaker 1: find find middle ground in terms of what's required.
Speaker 3: Because at the end of.
Speaker 1: The day, I do believe that there is utility and
Speaker 1: value in this underlying technology and we're just scratching the
Speaker 1: surface with use cases and paired with these new use cases,
Speaker 1: and to actually encourage innovation in this space, we will
Speaker 1: need you know regulation and guidance that that makes sense
Speaker 1: and is feasible for people to continue to adopt.
Speaker 2: So yeah, well said, I got some wrap up questions
Speaker 2: here for you. First, if you could create your own metaverse,
Speaker 2: what would the theme be?
Speaker 1: Oh, you know, that's interesting, If I could create my
Speaker 1: own metaverse, actually am I'm really passionate about education. I
Speaker 1: love education and at some point in my life I'd
Speaker 1: love to be a teacher, and so I'd love to
Speaker 1: see a metaverse for some sort of innovated education environment.
Speaker 2: Awesome. And then some rapid fire questions versus favorite food.
Speaker 3: Favorite food, Oh, my word, my favorite food is a smoothie.
Speaker 2: Favorite musician or band Diplow, favorite movie Leelee Blonde? And
Speaker 2: favorite book?
Speaker 3: Oh, favorite book? I am Malala.
Speaker 2: And when you're not working at tax Bit, what are
Speaker 2: you doing for fun?
Speaker 1: I am in the mountains doing all things skiing, snowboarding,
Speaker 1: trail running, and I also am a freelance artist.
Speaker 2: M HM, Reagan. Pleasure chatting with you. Appreciate the insights,
Speaker 2: and you know, hopefully we get additional clarity from the government,
Speaker 2: the I R S and they get get it right,
Speaker 2: you know, balance regulation and legislation. So but thank you
Speaker 2: so much for joining me.
Speaker 3: Yeah, thank you.