From Resistance To Acceptance, The Largest Banks Are Accepting Bitcoin’s Distributed Ledger Charge
From Resistance to Acceptance, Largest Banks are Accepting Bitcoin (BTC)
There has been a significant uptick in the number of big banks investing in Bitcoin. The banks are reportedly investing around $50 million to come up with a blockchain-based digital cash settlement system.
Bitcoin is undoubtedly the ultimate representation of an alternative financial system. What then, would cause these big banks to decide to be a part of the cryptocurrency phenomenon? Sdblro, a Crypto Nerd, took to Reddit took an interesting view to it all:
“What caused Jamie Dimon, the CEO of JP Morgan to go against Bitcoin in public and few months after it to invest in cryptocurrencies? The answer is Greed. Most of the banks don't really care about blockchain and about being innovative. They care about money, and they will do whatever they can to maximize their profit. It actually might be a good thing for us because banks can bring insane amount of money into the ecosystem”
That may be a rather blunt assessment but there are some truths in it. After all, banks like JP Morgan realized pretty fast that there is an entire economy in crypto and would like to get a part of the pie. This is purely business; there is value within this system and profit margins can be insanely high. Any investor will be naturally drawn to this. Given the logistical needs between Bitcoin traders, and exchanges, the banks could provide much-needed business efficiency.
Banks Flocking To DLTs
In a recent Reuters report, about a dozen unspecified banks are looking at creating the digital settlement system. Accordingly, the new entity will be called Fnality and is expected to launch next year.
Banks would definitely be interested in being the intermediary between the virtual currency space and banking services. In fact, Swiss banking giant UBS was said to be working on a coin that would be “linked to real-world currencies and connected to central bank accounts” as early as 2015 with blockchain startup Clearmatics. This startup filed to trademark the word “Fnality” meaning that it is likely that UBS is part of this project.
The banks could very well have strategic intentions in their plans to get in on the crypto train. After all, the potential of blockchain technology is seemingly endless. As a result, a blockchain investment is a key part of the investment strategy of certain institutions.
The amount of money flowing in this industry is obviously a catch. For example, ICOs alone represents a multi-billion dollar industry which means high revenue streams for those involved. The inconsistency notwithstanding, this industry is definitely lucrative.
Bitcoin has shown its resilience over the years. The recent resurgence in price serves as the latest clear example that this coin will be here for good. Banks may have initially wished away the phenomenon but Bitcoin is now a decade older with increased use cases.
Four other banks signaled interest after UBS. BNY Mellon, ICAP, Deutsche Bank and Santander all joined in developing the Utility Settlement Coin. Barclays Bank also the through a spokeswoman stated;
“We are a member of the USC Project and can confirm that the Research & Development phase is coming to an end.”
The major banks of the world are slowly but surely getting into the virtual currency space. The reasons may be varied but it is all a testament to the transformative potential of Bitcoin.