BANKS AND CRYPTO
Cryptocurrencies are thought to be the bank killers by most, so it’s typical to think that banks won’t like crypto, naturally. What crypto has done is to give access to the financial market to more people than ever before. While banks could refuse customers, cryptocurrencies would welcome anyone from anywhere, whether Nepal or Uganda, the US or Switzerland. Nobody will ever forget people like Warren Buffet, part-owner of Bank of America and American Express, calling bitcoin “a pyramid scheme” to protect their bank status. Still, quite obviously, crypto survived all the negative press done by institutions like banks, and it’s a competitor now. But some banks have moved on, admitting that cryptocurrencies or at least blockchain are the future of finance. China unveiled its new digital currency last month, and Ripple won its lawsuit brought by the SEC so more banks would naturally come on to crypto in the long run, but we’ll discuss their opinions in this article.
WHICH BANKS HAVE JOINED CRYPTO REVOLUTION?
The involvement of banks and financial institutes differs when it comes to cryptocurrencies. Some are built on it, some are using its technology, others have accepted it, and some are planning on it.
Among those big banks like JP Morgan Chase and Citibank are actually using blockchain technology right now. And other smaller banks have even opened accounts to let users hold cryptocurrencies.
There are some banks like Bitwala that hold banking licenses in Germany and banks fully on crypto. Numerous other financial institutes also have e-money and exchange licenses and provide banking services on it. Barclays in the UK used to have an official partnership with the US company, coin base. Meanwhile, other banks even refuse to accept crypto profits as deposits.
WHAT BANKS SAY?
Citigroup was the first bank to invest in cryptocurrencies without owning them in 2018, which led to many forex firms starting crypto indexes. Citi has been profiting from crypto since 2018 and has said that bitcoin would be the first coin to get mainstream acceptance.
Bank Of America is the exact opposite; while not investing themselves, they strongly discourage people and their own clients from investing in bitcoin and other cryptocurrencies by inciting that they are too volatile to be held as an investment instrument and their supply is controlled by whales (which is not true at least in bitcoin’s situation and even if it was, isn’t that the same for any financial instrument? Hint, US dollar)
BNY Mellon that manages over 2 trillion dollars of assets has announced in February 2021 that it will have plans to store and manage bitcoin and other cryptocurrencies on behalf of the clients
Morgan Stanley has invested almost 250 million dollars in crypto using a subsidiary called MicroStrategy and has issued a report saying that cryptocurrencies will soon become an investable asset class (in their opinion, which BTW is a huge milestone in banking)
WHAT TO EXPECT?
Aside from El Salvador announced that it would recognize bitcoin as legal tender, no other country on planet earth recognizes any cryptocurrencies as an actual currency; this doesn’t apply to China’s digital yuan. But with banks and governments, and institutional investors coming toward crypto’s way, and with blockchain technology being almost anonymous and decentralized, it’s pretty clear that most governments, like Australia and the UK, will recognize cryptocurrencies as some form of investable asset. You will pay Capital gains tax on its profits, like any other investable asset. But governments like Sweden and even the federal reserve have announced that they will use blockchain technology to issue their own digital currencies. This is mainly because they understand that crypto is inevitable and “if you can’t beat them, join them.”
Cryptocurrencies are extremely profitable and functional. Right now, you are reading this article. Crypto ATMs are working in Thailand and across Europe. There are exchanges and traders worldwide, and more and more companies are joining crypto by issuing tokens and building blockchains every day. And the community seems to be expanding from this point forward.
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