Traditional Banks May Be Forced To Change Their Views On Crypto

Last month, Kraken became the first cryptocurrency exchange to officially become a bank. 

The Wyoming Banking Board voted to approve the San Francisco-based crypto exchange’s application for a special purpose depository institution (SPDI) charter. 

Less than 3 years ago, Lloyd Blankfein — the CEO of Goldman Sachs — called cryptocurrency a fraud. The bank has since changed its mind and is currently investing in cryptocurrencies themselves. 

A New Generation Of Banks On The Horizon

Goldman Sachs isn’t the only financial authority to change its tune. The central banks of multiple countries are looking into national cryptocurrencies.

Countries such as Sweden, Canada, and China are all actively investigating the potential benefits of a central bank-issued digital currency. However, the RBA isn’t as interested in the use cases of blockchain technology.

The RBA isn’t fully disinterested, however: Although the Reserve Bank of Australia currently believes a “digital Australian Dollar” would be risky, it is still looking into Ethereum-based solutions for wholesale purposes.

In a payments paper issued on Thursday, the RAB expressed doubts regarding the future of stablecoins, along with cryptocurrencies such as Facebook’s Libra project.

The RBA has stated that it remains to be seen whether or not Facebook’s Libra cryptocurrency will gain regulatory approval and be allowed to operate in Australia.

Private companies may still have the upper hand, however. Kraken, for instance, is already forming a partnership with Silvergate bank — which may bring SWIFT and FedWire crypto funding choices for the USA market.

 Well-known crypto exchanges Coinbase and Gemini are also now customers of JPMorgan, even though JPMorgan CEO Jamie Dimon routinely denounced the worth of Bitcoin and cryptocurrencies just some little years ago.

The days when cryptocurrencies were regarded as a tool for cybercriminals to make anonymous transactions are long gone. Of course, privacy coins still exist — but they are used only by niche traders. 

Given the popularity of cryptocurrencies since the 2017 boom, we may soon see demand for cryptocurrency exchanges at our ATMs — and banks would be hard-pressed to not offer the service. 

Whether the cryptocurrency offered by banks would be the national digital version or the already popular cryptocurrencies, however, remains to be seen.