Rebecca Harding, a financial journalist, said to Forbes during an interview that major financial institutions are ready to participate in Cryptocurrency investments. She is also the CEO of Coriolis Technologies that specializes in financial trading technology services. She further said that a majority of banks are “curious about Cryptos” and have a “healthy skepticism” of the widely publicized Digital Assets.
The Major Banks Are Setting The Precedence
The major banks that Harding was talking about are Citigroup, Morgan Stanley, and Morgan Sachs. They are US financial giants whose decisions are likely to have an impact in other countries as well. The banks have, for instance, started to develop financial products that to cover the needs of Digital Assets investors such as institutions and individuals. The new model is referred to as “trusted custodian solution.”
The first example is by Morgan Stanley. The institution is developing complex derivatives to facilitate Bitcoin swap trading. The bank, however, has tailored the product to meet the needs of institutions in the near future when demand from institution picks up.
Secondly, Goldman Sachs is also exploring on launching a Bitcoin swap trading. The firm released the plan to media outlets on 13th September.
Lastly, Citigroup revealed plans to revamp the outdated American Depositary Receipts (ADR). The ADR service is aimed at helping institutions to invest in Cryptocurrencies without holding any of the Digital Assets.
Banks Are Collaborating With Blockchain Firms
Harding says that the banks are working closely with Cryptocurrency developers, traders, and users to study Cryptocurrencies. The major area of focus is price analysis, volatilities, trends and reading market indicators to be in a better position to offer better services to investors. Hence, fintech Blockchain firms are at the forefront of the quest by Banks to diversify their services to Digital Assets investments.
Apart from looking to attract institutions to invest in Cryptocurrencies, the Banks are also exploring ways of keeping up with technological trends in Blockchain technology for future relevance.
Banks Are Also Investing In Cryptocurrencies
Apart from developing solutions to offer Crypto-related services, banks are also becoming major contributors to Crypto markets by buying and holding into Cryptocurrencies. Although the information is widely kept as a secret to avoid backlash or criticism from skeptics. There is credible data to show that in some countries such as South Korea, commercial banks are holding $2 billion worth of Ethereum and Bitcoin. Generally, banks are still falling behind in Crypto markets investments but the trends in 2018 indicate progress in a good direction.
Government Regulators Will Determine The Future Of Cryptocurrencies In Banks
Banks operations are subject to government regulations through Central/Federal/Reserve Banks. In most countries, the governments are exploring ways of regulating the use of Cryptocurrencies to prevent the risks that through unforeseen volatilities in Crypto markets. However, recent developments show that concerted efforts between policymakers on one hand, and Self-Regulating Organizations (SROs) on the other are bearing fruit. Cryptocurrencies are gaining acceptance in the regulatory realm.