Tuesday, April 23, 2024

Banks say they are ready to integrate cryptocurrencies into their financial products


US banks may soon offer their customers to buy cryptocurrencies – Geeko

New York Digital Investment Group (NYDIG) is a firm that offers financial services dedicated to Bitcoin. It has partnered with the global banking technology solutions group Fidelity National Information Service (FIS) to create and provide guidance to US banks wishing to offer exchange services.
cryptomonnaies directly to your customers.

Asked by the US channel CNBC on Wednesday, NYDIG’s director of banking solutions, Patrick Sells, said that several small banks had already signed up for the program, but that the firm was also in contact with large institutions. In fact, according to him, big banks like JPMorgan o Bank of America, which were previously reluctant to Bitcoin, could change their minds if the adoption of cryptocurrency trading proves successful for smaller banks.

The growing interest that more and more US banks have in accessing crypto assets can be explained by the success of exchange platforms such as Robin Hood or Coinbase, the latter was recently made public with great success. The amount of money deposited in the accounts of these platforms is staggering. Some 9.5 million Americans have traded cryptocurrencies on the Robinhood platform since the beginning of the year, and Coinbase’s published revenue in the first quarter of 2021 amounts to $ 765 million. According to Yan Zhao, president of NYDIG, banks want a piece of the cake: “It’s not just banks that think their customers want bitcoins, they say: we have to, because we see the numbers. They see the deposits that go to the Coinbases, Galaxies and Krakens of the world ”.

A favorable legislative framework

Bitcoin is legal in the United States and is recognized as a digital asset that can be used for purchases of goods and services. The country has one of the most developed cryptocurrency ecosystems in the world, but the legislative framework around all of this is still unclear. Different government institutions do not have all the same definitions of what a cryptocurrency is, this has caused legal problems in the past. But federal legislation is being drafted to remove barriers to innovation. It will build a bridge between the various institutions and actors in the sector to harmonize the laws around cryptocurrencies. Large investment banks such as Goldman Sachs or Morgan Stanley have also already announced access to Bitcoin investment funds.

The benefit of active virtual currency exchange services with US clients is that a special license is required. You have to meet a lot of requirements to achieve this: transaction monitoring, taxes, collaboration with the authorities, etc. But the license is ultimately a promise of stability and reliability for banks interested in the crypto trading solution that NYDIG offers.

In contrast, most European banks remain cautious about adopting consumer cryptocurrency exchange solutions. Fears of the instability of these assets and the risks of money laundering still persist, although a new European Union anti-money laundering directive of 2018 required trading platforms to register in their member countries and establish security requirements and transparency. Not everything is perfect yet, but strict and clear rules to avoid fraud should gradually reconcile traditional banking institutions with the exchange of crypto assets.

Ebenezer Robbins
Ebenezer Robbins
Introvert. Beer guru. Communicator. Travel fanatic. Web advocate. Certified alcohol geek. Tv buff. Subtly charming internet aficionado.

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