PwC Luxembourg, a European branch of the major institutional auditing firm, will start accepting payments in bitcoin from its clients on October 1, 2019.
PricewaterhouseCoopers (doing business as PwC) is the second-largest professional services firm in the world and one of the world’s Big Four auditors, along with Deloitte, EY and KPMG.
The decision to embrace bitcoin payments was made to respond to a “growing demand from the market” and reflects the firm’s “willingness … to support the growing national crypto ecosystem,” according to an announcement from the firm on September 2, 2019.
PwC Luxembourg said it closely collaborated with a local regulated exchange to support bitcoin payments but didn’t name which one. According to the Luxembourg Financial Industry Supervisory Commission (CSSF)’s website, there are currently two cryptocurrency exchange operators authorized in Luxembourg and supervised by the regulator: Bitstamp and BitFlyer.
Bitcoin: A “Secure Payment Alternative”
In its relatively short history, bitcoin has been a symbol of rebellion against major financial institutions, and it’s been (often exaggeratingly) associated with cyber crime and dark web drug dealers. Yet, despite these associations, bitcoin remains a reliable payment system and “the first peer-to-peer payment mechanism that cannot be compromised and is based on a decentralized trust model,” in PwC Luxembourg’s view.
It added that the new bitcoin payment capability will give its clients access to a secure payment alternative to traditional assets that reflects the evolution of the world’s economy.
“As part of [PwC Luxembourg]’s market assessment, what quickly became clear is that we could not continue to invest in the field, promote it, build solutions for clients and support their transformation while not also being exposed to it,” Thomas Campione, director and blockchain and crypto assets leader at PwC Luxembourg, said in the press release.
Leading by Exposure
“Our role is to lead and it is only by being an active leader with exposure that we at PwC Luxembourg can understand the challenges inherent to the crypto world,” Campione said. “It is very difficult to properly appreciate the challenges of AML/KYC-enhanced due diligence in a world made of public/private keys, with the complexity and risks of custodial solutions, or to comprehend the decentralized finance ecosystem growing ‘next door’ without being exposed to it in its day-to-day activities.”
The move is part of PwC Luxembourg’s broader strategy to push its proprietary global PwC-branded blockchain products, including its Smart Credentials blockchain platform as well as the recently announced Halo suite of crypto-audit tools, and appeal to the cryptocurrency community.
The firm said it strongly believes in blockchain technology as a medium- to long-term standard in the economy and strives to position itself as an early adopter.
Globally, PwC says it has more than 400 employees working on blockchain- and crypto-related topics. These are supported by more than 100 technical team members focusing exclusively on blockchain technology as well as a “Center of Excellence” that hosts some 20 blockchain developers.
Luxembourg’s Favorable Landscape
Luxembourg, the largest fund center in Europe and a leading wealth management and banking hub, has been working toward establishing itself as a major fintech driver in Europe, including installing favorable regulations that would allow startups to thrive.
On February 14, 2019, Luxembourg’s Chamber of Deputies passed a bill that provides a legal framework for securities issued on blockchain and distributed ledger technology (DLT) platforms, granting transactions done with the new technology the same legal status as traditional ones.
The move was welcomed by PwC Luxembourg and “will boost the much-needed confidence in the market and will stimulate investments in a wide range of blockchain-related initiatives,” the firm said in a blog post.
Cryptocurrency startups including Blockchain.com, Bitstamp and BitFlyer have all chosen Luxembourg to host their European headquarters.
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A Blockchain is a growing list of records, called blocks, which are linked using cryptography. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries. Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank.
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