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Crypto adoption has been accelerating lately despite the recent market turns proving that the industry may already be beyond the point of return. As such, large financial institutions previously objecting to legalizing crypto technology are slowly warming up to it, with the likes of Goldman Sachs, Bank of America, and JP Morgan Chase Banks even offering custodial services.
German Banks are offering crypto services to institutional investors
Crypto is still young and thus yet to be legalized in most nations, including Germany. However, the narrative is now changing slowly but at a steady pace. Germany is exploring the potentially game-changing abilities of the crypto industry due to concerns about missing out as other nations are doing the same.
In March 2023, Deutsche WertpapierServiceBank (Dwpbank) introduced its wpNex crypto trading platform that exposes 1,200 banks and financial institutions in Germany to digital assets. However, how well the banking institutions will receive innovation over time remains to be seen.
In other reports, several banking organizations already offer crypto services to institutional investors. Deutsche Bank majorly owns the asset management group DWS, which has been looking for a way of getting into crypto and exposing its investors to digital assets.
In April, DWS announced that it was working with Galaxy Digital to develop exchange-traded products linked to cryptos that will be available in the European markets. Its CEO posted a statement on Linked In saying that though cryptos are most fraudulent, some innovations will disrupt international markets.
Other banks like Commerzbank and Dekabank are among the growing entities seeking crypto licenses from Germany’s financial watchdog, the Federal Financial Supervisory Authority (BaFin). However, their plans are geared towards institutional investors and not retail.
Though there are still limits on who can use German banks to access crypto assets, crypto adoption is seemingly taking root. However, only time will tell where the government will stand regarding crypto adoption there.
Select U.S. banks spearheading crypto adoption
Though the U.S. SEC is vehemently going after crypto ‘troublemakers, banks in the country are not stopping or slowing down crypto adoption. The number of banks warming up to the industry is slowly rising, showing signs of possible total crypto adoption.
Goldman Sachs, a major banking institution in the U.S., began providing cryptocurrency trading in the U.S. in 2018 but had to discontinue it as investors began becoming wary. However, the 2021 bull market brought more pressure from investors to access major crypto assets like Bitcoin, which made the bank start offering crypto trading again. Now, it allows for the trading of both Ethereum and Bitcoin.
Metropolitan Commercial Bank is another U.S.-based financial institution allowing crypto trading via partnerships with major crypto exchanges like COinbase and Gemini. It also provides wire transfer services with Bitcoin firms and other crypto-related financial services.
JP Morgan Chase is one of the largest banks in the world and is based in the U.S. It has been gearing up to offer crypto services even with its CEO actively despising the assets on a personal basis. Now, his bank allows its users to connect to Coinbase exchange to buy and sell crypto assets. It has also built a private blockchain and crypto known as JPM coin to facilitate international payments.
Bank of America, one of the largest banks in the U.S., has shown itself to support crypto adoption, though it still doesn’t allow its customers to invest directly into crypto assets. It uses one of its subsidiaries, Merrill Edge, an electronic trading platform launched in 2010 to allow its customers to trade Exchange-traded funds (ETFs) that provide exposure to crypto assets.
In 2021, the Bank of America also introduced a new executive position, head of digital trading. Mark Donoghue will be helmed and tasked to deal with investment questions regarding digital assets.
HongKong banks exploring how to take part in spearheading crypto adoption
Chinese banks are readying themselves to offer banking services to offer crypto startup services in Hong Kong as the China ban still ensues but does not extend to the break-away city. As major crypto banks like Signature and Silvergate have already collapsed, these chines banks are scrambling to replace them.
Hong Kong-based ZA Bank is one such bank. It is already allowed to serve as a settlement bank for regulated Web 3 companies in the city. The online bank will now offer crypto-fiat conversions with two licensed digital assets, exchanges HashKey and OSL.
Other Hong Kong banks like Bank of Communications Co., Bank of China Ltd., and Shanghai Pudong Development Bank have also started to offer financial services to local crypto firms or, in other cases, offered to help. These developments foreshadow a growing acceptance of digital innovation, likely boosting crypto adoption in Asia.
On May 24, 2023, Binance CEO revealed that China State TV had covered crypto news long after the country enacted a blanket ban against investing in crypto assets in September 2021 and jailed the ‘lawbreakers’ on this front. However, things did not cool down as Bitcoin registered an all-time high price in November of the same year.
Now, the narrative of nations against crypto adoption seems to be changing into nations protecting investors against being taken advantage of by regulating digital assets. This journey has been joined by banks, which shows that the crypto industry is still here to stay and most likely thrive. However, only time can tell how regulation will factor in the development and growth of the industry.
Keep watching Fintech Express for updates on this and other related stories. No part of this article should be regarded as financial advice. Do your research and use caution if you choose to invest in the crypto space.