Digital assets are all about milk & volatility!

CASSL chair Sophie Armstrong looks at digital assets, and explains why we should care about the ‘milk and volatility’ problem.

Bitcoin, Ethereum, Dogecoin, Tether… to name but a few. New digital currencies and tokens seem to appear every day, creating a dizzying landscape of possibilities and confusion.

But isn’t money supposed to be stable, predictable and boring? After all, you rely on it to pay for your groceries, bills and rent without worrying about sudden price swings.

That is exactly the problem with many digital assets. They are anything but stable. William Hobbs, Head of Multi-Asset Wealth at Barclays Wealth Management, recently shared an example that makes this crystal clear. Imagine going to buy a carton of milk with a digital asset whose value is changing every minute. One moment you have enough to buy it; the next, the price drops so much that you do not. This ‘milk and volatility’ problem perfectly sums up why digital currencies are not ready to replace the money in your wallet just yet.

For accountants, this volatility creates very real challenges in how to value, report and audit digital assets. Traditional accounting methods don’t always fit neatly, especially as regulations continue to evolve. Valuation requires a consistent and transparent policy that reflects market changes, while the fast pace and complexity of digital asset transactions demand robust tracking systems to maintain accurate records. Regulatory uncertainty adds another layer of difficulty, making it crucial for accountants to stay informed through professional groups and ongoing education. These challenges mean accountants must develop new skills and approaches to confidently guide clients and organisations through this rapidly changing financial landscape.

Understanding digital assets and their quirks is no longer optional. While they may not replace traditional currency overnight, their growing role in finance means accountants must be ready to lead the way.

At the Chartered Accountant Student Society of London, we regularly host events on emerging topics such as the above to help aspiring accountants stay ahead of the curve. If you want to explore these issues further, keep an eye out for our upcoming sessions and resources designed specifically for those building their careers in accounting.

• On 7 October CASSL and Deloitte are holding a darts event where you can also learn more about global career opportunities in the Caribbean. Find out more here