Report: COSO, Prominent U.S. Anti-Fraud Organization, to Issue Blockchain Guidance in 2020

The Committee of Sponsoring Organizations of the Treadway Commission (COSO), a prominent anti-fraud self-regulatory advisory in the U.S., will issue, “guidance for companies to strengthen their oversight of blockchain-technology projects,” in Q1 2020, The Wall Street Journal reports.

According to the WSJ, “The guidance is aimed at executives in financial services as well as companies using blockchain technology in their supply chains…”

COSO’s chairperson Paul Sobel told the outlet:

“I want to make sure that we’ve got that properly controlled because it is a very different view of the world when you have distributed ledgers…It isn’t something that is contained in your own system.”

“Blockchain” or “distributed ledger” technology (DLT) is a type of self-settling transaction software that may, in some cases, streamline messaging, transfers of “digital value” (“tokenized assets”) or the tracking of units in a supply chain.

DLT advocates say that, currently, business processes are hampered “siloed” and proprietary data systems. They claim DLT systems can be used to “digitize” archaic processes and allow small firms to compete against big finance in fundraising, lending and securities settlement.

“Blockchain” detractors, for their part, have argued that blockchain tech, which was first popularized by Bitcoin, a self-settling “uncensorable” payments network, has been overhyped when it comes to enterprise applications.

Bitcoin programmer Jimmy Song has argued that most private businesses or consortiums could simply add a basic encryption feature to SQL databases they may already use.

Song’s beliefs follow blockchain detractor, the author and Unix-system administrator David Gerard, has also questioned the tech’s ability to “disintermediate” (obsolete) human oversight to the extent promised.

Much R&D money has nonetheless been applied to examine blockchain’s enterprise potential, in part due to crossover excitement generated by the ICO (initial coin offering) boom of 2017.

The results of blockchain trials have so far been very mixed. If the tech does work in the end, the sometimes competing organizations collaborating on blockchains will have to sort out rules.

In September of this year, Accenture and the Depository Trust & Clearing Corporation (DTCC) circulated a white paper which, “explores the generalized governance model that DTCC is implementing for its TIW-DDL system,  a real-world implementation of DLT…(for the) financial industry.”



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