A recent study by CoinGecko has revealed an intriguing trend in the financial world: two-thirds of the 30 largest global banks, based on assets under management (AUM), have embraced crypto trading via regulated platforms.
Cryptocurrency: A Rising Trend Among Banks
Approximately 74% of the top 50 banks globally have moved towards crypto trading by establishing connections with regulated exchanges. However, interestingly, these banking giants still need to extend retail crypto trading or on-ramping services from their platforms.
Regarding resistance to crypto integration, Chinese banks lead the pack. The top four banks, which aren’t supportive of crypto, manage a staggering $19.87 trillion in assets, over 20% of global assets. These banks reflect the stance of their mainland, where cryptocurrency trading remains prohibited. Additionally, the government aggressively promotes its CBDC (central bank digital currency).
Yet, there are signs that China could be warming to the concept of cryptocurrencies. With Hong Kong opening its doors and inviting prominent exchanges such as Coinbase to establish themselves, China might be gearing towards a more crypto-friendly stance.
Furthermore, the subsidiaries of some of the largest Chinese banking institutions have reportedly begun extending their services to crypto-based businesses in Hong Kong or expressing interest in doing so.
Global Banking Giants: A Snapshot
The report also revealed that the top 50 biggest banks globally managed a remarkable $89.37 trillion in assets in 2023. The United States and China remain dominant in this group, boasting 19 of the top 50 banks by AUM.
However, these banking titans’ slow adoption of blockchain and cryptocurrencies can be attributed to specific roadblocks: regulations, market volatility, and high-profile exchange failures. “Stringent regulations, market instability, and prominent exchange failures like FTX have delayed the integration of crypto trading into these large banks,” the report highlighted.
The CoinGecko research also tagged several U.K. banks as “crypto-friendly.” However, this may not be entirely accurate. Several British banks imposed restrictions on customer transactions with crypto companies earlier this year.
Defining a Crypto-friendly Bank
The report classified a bank as crypto-friendly based on whether it provided crypto trading or on-ramping services via the bank’s platforms. Alternatively, if it allowed its current accounts to connect to a regulated crypto exchange.
While the global banking landscape is gradually shifting towards cryptocurrency trading, the journey is fraught with regulations, volatility, and other challenges. The banks are treading cautiously in this new era of digital assets, taking strides to balance customer interests and regulatory compliance.
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