Cryptocurrencies are digital assets with cryptography at the core that operate securely and with no middlemen. Over the last 10 years, digital assets have attracted many businesses and investors. Institutional trading of crypto is developing at a rapid pace, stimulating the growth of infrastructure and institutional services for large market players.
Firms and companies aim to integrate digital assets into their systems as an additional option to pay, focusing on advanced clients. Even banks and financial institutions are tapping into the crypto sector either to launch crypto trading desks for their clients or to participate in one or another crypto market-making program and capitalize on it.
In this article, we will talk about cryptocurrency in banking and discuss its impact.
Are Banks Switching to Cryptocurrency?
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From 2021 to 2022 at least 23 banks invested in digital assets. Banks investing in crypto include:
- Morgan Stanley
- United Overseas Bank
- BNY Mellon
- Goldman Sachs
- Commonwealth Bank of Australia.
These personal banks serve the needs of customers in the crypto market:
- Revolut
- Monzo
- Juno
- Fidor.
Cryptocurrency and Banks: The Impact of New Technologies
Traditional banks are no longer the only option for people to get financial services. Today, they can access innovative financial products and services from crypto fintech companies and platforms. This forces traditional banks to adapt to the new reality – adopt crypto and invest in technologies.
Crypto offers an alternative way to conduct financial operations – no middlemen, no delays, no high fees. This undoubtedly disrupts traditional banking and causes the move from banks to crypto exchanges where people can buy and sell assets with no middlemen and delays.
In addition, crypto offers cheap and fast cross-border transactions, thus, many financial companies actively integrate crypto assets to meet the needs of their crypto-oriented clients.
Final Thoughts
Digital assets opened a new way for people to conduct transactions with money. It has caused competition in the financial sector, making banks adopt crypto, otherwise, stay out of competition.
Cryptocurrency in banks is a widespread phenomenon today, and such large names as Morgan Stanley and Goldman Sachs are the best proof of that.
As the industry evolves, this trend is supposed to gain momentum, and the banks that catch it will find themselves ahead of the competition.