Major Financial Banks Are Eager About Cryptocurrency but Require Regulatory Clearance First
Most Banks Are Eager About Cryptocurrencies But Are Waiting For Regulatory Clearance
According to Rebecca Harding who works as the CEO of Coriolis Technologies, a trading technology company that provides services to major banks and corporations in the traditional finance sector, a large majority of banks are healthily cynical and inquisitive about crypto.
She revealed that banks have started to acknowledge the need to invest in the market to keep up with developments in the cryptocurrency and blockchain space, but are currently awaiting the green light from regulators and financial authorities.
To remain compatible in the fintech space and connected to the cryptocurrency space, Harding said that banks are working with newly emerging fintech companies to study the cryptocurrency market and will soon allocate capital into the asset class.
Goldman Sachs, Citigroup, and Morgan Stanley, three of the largest investment banks in the US, have already developed a wide range of products including a trusted custodian solution to serve institutional investors in the cryptocurrency market.
This is not a phenomenon of American banks. Earlier this year, commercial banks in South Korea were reported to be holding more than $2 billion in Bitcoin and Ethereum. Bank of Korea, the central bank of the country, stated that the amount banks have invested in cryptocurrencies is relatively small in comparison to their investment in other equity markets. But, local investors have expressed their optimism towards the fact that leading banks hold a significant sum of cryptocurrencies.
Harding stressed that a growing number of banks have begun to invest and hold cryptocurrencies because they see the risk of their business models proving irrelevant in the years to come if they fail to address the needs and demands of millennials and the new generation customers.
In the same interview, she said that banks could spell the end of bitcoin. Banks are already forging the bullet to tackle cryptocurrencies and Bitcoin in particular. In her view, the recent moves by various banks to embrace cryptos and the blockchain technology points to their rather open motive to adapt to the turbulence created by cryptocurrencies in the financial world. For example, a number of banks are already using Ripple’s RippleNet that facilitates faster and cheaper cross-border funds transfer using cryptocurrency.
The fact that banks are now embracing blockchain products and adapting to the waves of cryptos means that they’re indeed trying to fix the broken system. However, a lot of banks are yet to fully endorse the idea of cryptocurrencies as they quietly wait to see how regulators will deal with the upcoming industry.