During the ongoing Consensus 2018 blockchain conference in New York City, a group of actors staged a satirical protest, pretending to be “bankers against bitcoin.” The protestors held signs pining for high transfer and remittance fees. In light of the classic trope of cryptocurrency versus big global financial institutions, let’s look at how each big bank currently stands on bitcoin (BTC), cryptocurrency.
The biggest bank in the US by total assets, JP Morgan Chase (JPM), is warming up to the idea of cryptocurrencies. Today the bank’s co-president Daniel Pinto gave an interview with CNBC in which he seemed optimistic about crypto. He stated that JPMorgan is looking into bitcoin futures and trading digital currencies. Though he criticized the private, anonymous nature of crypto, he conceded that tokenization of the economy is a real prospect. It seems JPMorgan is considering following the footsteps of Goldman Sachs (GS) to create a market for institutional clients.
Bank of America (BAC) remains anti-bitcoin and anti-crypto. It was one of the earliest to ban crypto purchases on its credit cards, and even closed a children’s account because of an alleged crypto connection. Recently, the bank has also called BTC one of history’s greatest bubbles that is ‘already popping.’ This month its CTO Kathy Bessant called crypto troubling, as it is “designed to not be transparent.” She added that crypto hurts banks’ efforts to catch bad actors and criminals.
Wells Fargo (WFC) is also rather hostile to BTC and crypto. Though it keeps a low profile in the news, it remains against the idea. In January the bank banned its brokers from trading the Bitcoin Investment Trust (GBTC) financial product. Many customers have actually complained on Reddit that Wells Fargo is hostile to both crypto and cash.
Citigroup (C) has been sending mixed signals. In January, Citi’s private banking division argued that BTC is not digital gold, citing high volatility and speculation. But recently, it has been looking to hire people with a crypto background to help staff its anti-money laundering division. Some of its job listings are seeking candidates with “Bitcoin Professional Certification,” an unusual request.
Essentially, Wall Street’s sentiment toward cryptocurrencies and blockchain tech is no longer as clear as the simple ‘enemy’ trope. As Goldman continues to be a pioneer in Wall Street’s relationship with crypto, other big banks are likely already testing the waters. The demand for crypto from institutional clients, potentially including hedge funds, pension funds, and university endowments, could be far too profitable for most banks to ignore.
Some banks will probably follow Goldman and JPMorgan and create crypto trading desks. But it is likely that risks and regulations will ensure continued bans on credit card purchases. Of course, some banks, like the Berkshire-owned Wells Fargo and Bank of America, will likely remain relatively hostile to the idea of cryptocurrency.
Photo: Descryptive (Flickr)
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