Due to severe market volatility and the industry’s absence of accounting norms, Twitter’s Chief Financial Officer (CFO) Ned Segal indicated in an interview that investing in crypto “doesn’t make sense right now.” To invest in crypto firms and similar avenues, Segal said that Twitter would have to amend its present investment standards, which now only allow the company to maintain assets that are more stable in nature, like as stocks, on its balance sheet.
According to a Wall Street Journal story, Segal cites a widespread fear among Twitter finance managers about crypto’s volatility, alleging price fluctuations are one of the main reasons the firm doesn’t employ crypto for corporate investments.
Indeed, finance departments from a number of US-based companies have addressed the issue of the necessity for crypto assets to have their own accounting standards and processes.
Industry behemoths have even sought the Financial Accounting Standards Board, or FASB, a private standard-setting agency that develops and releases financial accounting standards for firms in the United States, to lay down some ground rules for how to deal with crypto assets.
While Twitter’s CFO seemed hesitant to participate in crypto, Twitter CEO and co-founder Jack Dorsey has embraced the realm of digital assets wholeheartedly. Dorsey made an NFT out of his first tweet, the first-ever tweet on Twitter, in March. He sold them to Bridge Oracle CEO Sina Estavi for $2.9 million (approximately Rs. 21.5 crores) through a marketplace called Valuables.
Dorsey is a self-described ‘Bitcoin maximalist,’ in addition to dabbling with NFTs.
Twitter may not be investing directly in cryptocurrency just yet, but it has announced the formation of a blockchain team managed by Tess Rinearson, a seasoned blockchain engineer, to “research ways to incorporate decentralised technology into our products and infrastructure.” The team’s initial priority will be to expand decentralized apps (dApps) that allow producers to manage virtual goods, currencies, and ways for followers to support their community. Rinearson implied that her team will subsequently strive to use crypto technology to improve Twitter’s identity, community, and ownership.
Twitter said in September that it was experimenting with techniques to authenticate NFTs used as profile images, as well as a tool to tip producers with Bitcoin over the Lightning network.