Digital Asset Risk and Regulatory Compliance Expectations for 2024

Executives involved in managing digital assets like digital currencies, digital securities, and stablecoins expect digital asset risks to increase and the regulatory environment to become more complex in 2024, according to a recent Deloitte poll. Related investments at most organizations are expected to remain flat.

Looking at the next 12 months, nearly one-quarter (24.7%) of respondents believe that the number and size of digital asset risks their organizations must manage will increase. Further, 45.5% state that an increasingly complex regulatory environment stands to pose the greatest challenge to their organizations’ related compliance risk management efforts in 2024. 

In line with risk expectations, respondents are most likely to expect no change in their organizations’ digital asset investment strategy in the year ahead (46.5%), although 17.9% indicate their organizations will increase digital asset investments in the next 12 months. Among those expecting an increase, public company leaders are more than twice as likely as private company peers to report plans for increased investments (public = 25.4%; private = 10.5%). 

“We expect interest in tokenization and digital assets to grow as a wide range of organizations continue to explore use of distributed ledger technology to drive efficiencies and evolve business model strategies,” said Richard Rosenthal, a Deloitte Risk & Financial Advisory principal specializing in risk and regulatory matters, Deloitte & Touche LLP. “At the same time, digital assets pose unique risks for organizations, making it critical for those using these products to proactively manage related risks to protect investments and navigate concerns from investors, policymakers, and the financial markets more broadly.”

Despite the outlook on the digital asset risk landscape, just 27% of polled executives say their boards are updated on digital asset risk and compliance matters quarterly or more frequently. Public company professionals are more likely to report digital asset risk efforts to their boards more often than private companies (public = 31.2%; private = 23.2%).

“Digital asset risk should be a mainstay board agenda item for any organization that actively uses digital assets in its operations,” said Tim Davis, a Deloitte Risk & Financial Advisory principal and U.S. blockchain and digital asset leader. “The spectrum of risks linked to digital assets is broad and complex, with the capacity to impact a company’s financials, reputation and more if not properly monitored. Boards need to be assured that these risks are not just acknowledged, but are actively and effectively being managed across the enterprise.”

To learn more about how organizations can manage risks related to digital assets, read Deloitte’s “Digital asset risk assessment: A new paradigm in risk management.”