Financial institutions are showing a very keen interest in Bitcoin and other cryptocurrencies. While mainstream adoption plans have yet to come to fruition, former head of JP Morgan’s blockchain operation Amber Baldet is confident this change is coming sooner rather than later.
The Future of Banking and Cryptocurrency
It has been documented over the past few months how major banks want to launch a cryptocurrency trading desk. Albeit none of those plans are set in stone, the genuine interest in dealing with cryptocurrencies is there. As is always the case when exploring new markets, the regulatory red tape can be quite a hindrance. So far, that holds true as far as these alleged “trading desks” are concerned.
Even so, these challenges will be overcome eventually according to the findings of Amber Baldet, the former head of JP Morgan’s blockchain operation. She believes a host of financial institutions are looking to incorporate both distributed ledgers and cryptocurrencies into their products, and while doing so will take time, Baldet claims the changes are “inevitable and happening soon”.
Despite the regulatory challenges to be overcome and the legal aspects to consider, it appears to be a matter of time until banking and cryptocurrency come together. A precedent was earlier created when both CBOE and CME launched their Bitcoin futures trade offering, which bypassed all of the proverbial red-tape with relative ease.
One of the bigger challenges outside of these issues is the custody of cryptocurrency funds. Financial firms are not necessarily equipped to deal with digital assets in a safe and secure manner. More specifically, cryptocurrencies require a completely different approach compared to digital stocks and bonds. One option is to let consumers control their own funds, yet that would make banks virtually obsolete.
Thankfully, it seems some solutions are under development as we speak. Coinbase is working on new offerings which can solve all of these problems in the coming few months. Additionally, Japanese firms are also working on a custodial service designed specifically for cryptocurrency holdings. However, it remains to be seen how the major financial institutions of the world will respond to these new developments as cryptocurrencies remain somewhat of a fickle topic within the banking industry.
Based on the statements made by Amber Baldet, the banking sector will make its cryptocurrency-related move at some point. However, whether that move will take place soon or in a few years time is anybody’s guess. In any case, all of the aforementioned information further confirms that cryptocurrency isn’t going away and that the best is yet to come.