Report- Over half of the world’s top banks have invested in crypto and blockchain


According
to a survey by Blockdata, more than half of the world’s top 100 banks have
majorly invested in crypto, digital assets and blockchain technology platforms.
Over the last few years the popularity of Bitcoin has
skyrocketed in value and new cryptocurrencies are entering the space almost
each and every day. Governments and central banks may not have made up their
minds yet about cryptocurrencies but private banks are growing on rapidly in
crypto and blockchain technology.
A blockchain market analysist, Blockdata found in a
research that among the most active backers of crypto and blockchain platforms,
Citi group, Goldman Sachs, Barclays, JP Morgan and BNP Paribas are the top
investors in the blockchain market’s relay race. Standard Chartered has
invested $380M so far, followed by BNY Mellon at $321M, and Citi bank at $279M.
The report also suggested, 55% among the 100 high ranked
banks (mostly private) by AUM (Assets Under Management) are taking interest in
the crypto market.
Where
the banks are investing the most?
The research also denotes crypto custody as a main focus
point for banks betting high on the crypto universe. Nearly, 23 of the top 100
banks are either developing crypto custody solutions or backing start-ups that
provide custodial services for digital assets.
Banking institutions have offered custodial services for a
long time including gold or cash deposits, DEMAT accounts, and management of
other securities. Custodian solutions provide financial services to look after
their clients’ funds, for a fee. They either build their own technology to
provide this service, or use a technology provider whose solutions they can
integrate into their own systems.
Why the top banks have started
providing cryptocurrency and Bitcoin related services?
Witnessing the bigger cryptocurrency exchanges with a
section of their staff become considerably more lucrative or valuable than
other banks. This started in 2018 when the leading exchange at the time,
Binance recorded $54 million more profit than Deutsche Bank, with just 200 vs
100k employees. And recently, Coinbase’s valuation was higher than Goldman
Sachs, with just 4% of their employees.
Among the other two developments that convinced the top
banks to invest is, in 2020 a change in regulations took place, allowing banks
to provide crypto custody solutions. There have been countless requests from
their clients to offer Bitcoin solutions.
For more opportunity in near future, these banks globally
have doubled down on their investments to further help adopting blockchain
technology. Though it has to be acknowledged that more people would own digital
assets if they could do so through their existing banks.

Joyashree Dey
CBW - External Analyst
INDIA