Blockchain is a key plank to the Web3 movement

Stablecoins are just one of the Web3 advances that are poised to upend finance and investing, as well as the work of accounting (iStock)

Last summer, as inflation soared 124.4 per cent over the previous August, Argentinian investors began flocking to a new type of cryptocurrency, one that’s linked to the U.S. dollar.

With their wild fluctuations, Bitcoin and other digital currencies are still often viewed as fringe by many investors. But according to Jonathan Mirarchi, a CPA and senior associate in tax digital enablement at PwC Canada as well as co-founder of Web3 Montreal, emerging currencies such as USD Coin (USDC) represent a significant leap toward bringing crypto—and the entire Web3 ecosystem—into the mainstream.

“Because of the inflationary crisis, there are limitations on how much U.S. money each individual is allowed to acquire due to limited liquidity,” says Mirarchi. “But because of crypto, Argentinians are actually able buy U.S. dollars from a global market and hold those dollars in their own custody and not have to rely on the banking system to access it.”

It’s an advance that propelled Argentinians to one of the highest levels of cryptocurrency ownership in the world—and a sign of what’s coming in the Canadian financial sector (despite the country not suffering the same level of inflation as Argentina), Mirarchi says.

“We’re starting to see major institutions investing a lot of time and effort into these new products,” he says, citing PayPal USD, which launched last August, as one example. “It makes sense for a company like PayPal because they process a lot of global payments on a daily basis. What we’re going to see as these new types of payments become common is they’re going to decrease settlement times to near instantaneous, they’re going to decrease interbank transaction fees to near zero, and they’re going to allow for a global settlement of dollars with an efficiency we’ve never seen before.”

But stablecoins are just one of the Web3 advances Mirarchi believes are poised to upend finance and investing—as well as the work of accounting—as we know it.

“Currently we live in the age of Web2, which allows us to both read and write on the internet. Web1 was the internet of the ’80s and ’90s that was read-only. Then in the 2000s and 2010s, we were introduced to Web2, which allowed us to interact. It gave us things like social media and e-commerce, which didn’t really change the underlying systems, just how we access them. Online banking didn’t change the way dollars are held in our bank accounts—it just gave us a platform to view our bank account balance or make transactions online,” Mirarchi explains.

“Web3 allows us to interact with assets in ways we weren’t able to in the past. People are starting to wake up and realize they can tokenize other types of assets—real estate, bonds, securities—and that’s leading financial institutions and banks to start building new products,” he says.

While mass adoption may still be a ways off, Mirarchi predicts change will feel “slow, then all at once.”

For CPAs, he predicts a steep learning curve—but he also believes the very nature of how Web3 works will resolve significant legacy challenges.

“Blockchain transactions come from a technology that is basically a public ledger,” he says. “Every transaction creates a trail that is auditable. Any individual is able to verify and confirm that money has actually been transferred on specific dates to specific people. With an advancement called Zero Knowledge Proof, we will even be able to conduct private transactions and then prove certain conditions are true without having to reveal sensitive information.”

Although a lack of regulation might make Web3 feel a bit like the Wild West now, Mirarchi predicts this will change quickly as new innovations bubble up.

“It’s like putting cars on the street. As they got more popular, we needed infrastructure, and speed limits and road rules,” he says. “There’s a large opportunity for accountants who start preparing themselves. It’s not a matter of if—it’s a matter of when.”

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