Wall Street banks have entered the cryptocurrency market: they are still cautious in the face of regulatory pressure

With the increase in customer demand for investing in cryptocurrency, more and more investment banks have begun to provide cryptocurrency services. However, facing heavy regulatory pressures, Wall Street banks are still cautious in deploying cryptocurrencies.

Goldman Sachs chief executive David Solomon stated in a congressional hearing earlier this month that the bank is restricted by regulations and cannot act as a major cryptocurrency trader or own a majority of cryptocurrencies.

Bank of America has established a new team specializing in cryptocurrency, which is Wall Street’s latest effort to profit from investor enthusiasm for digital assets.

According to an internal memo from Bank of America to employees, the team is led by Alkesh Shah. Its research scope also covers digital currency-related technologies and will report to Michael Maras, the head of Bank of America’s global fixed income, currency and commodities research.

Candace Browning, Head of Global Research at Bank of America, stated in the memo: “Cryptocurrencies and digital assets constitute one of the fastest-growing emerging technology ecosystems. With strong industry research and analysis, market-leading global payment platforms and blockchain expertise , We are in a unique position to provide thought leadership.”

Wall Street Bank is seeking to expand into the cryptocurrency world, and many banks are trying to provide wealth management products or custody services for this asset class. Some banks, including JP Morgan Chase and Goldman Sachs Group, have begun to provide cryptocurrency futures trading.

Goldman Sachs’ main brokerage department is clearing and clearing cryptocurrency exchange-traded products (ETPs) for some European hedge fund clients. These services are currently available to a limited number of clients. Goldman Sachs has been reviewing this matter internally because it focuses on improving Many customers launched the service.

JPMorgan Chase became the first large bank to expand cryptocurrency trading permissions, and not just for high-net-worth customers. The bank has been vigorously developing its US$630 billion wealth management business, and told wealth management consultants in a memo earlier last week that they can now buy and sell orders for five cryptocurrency products, four of which are from gray Degree (Grayscale), a kind from Osprey Funds, effective from July 19th.

State Street vice president and head of global marketing, Nadine Chakar, said in an interview with The Scoop that State Street is working with customers to develop solutions to help customers deploy Bitcoin and other encrypted assets. She pointed out that although the price of crypto assets has plummeted recently, market interest has not diminished: “Price devaluation has not affected demand and interest at all. I think we still see many people enthusiastically embracing digital assets, in some cases cryptocurrencies. And every day you will see some large hedge funds or some large investors describing their support for digital technology.”

Following in the footsteps of US banking giant State Street, Bank of New York Mellon will provide business support for the new bank-level cryptocurrency trading platform Pure Digital.

Bank of America’s main brokerage department has begun clearing and settlement of cryptocurrency exchange-traded products (ETP) for European hedge funds. Bank of America has also approved some customers’ bitcoin futures transactions and is clearing cash-settled contracts. The market’s demand for encrypted ETP and other products has been increasing. According to Bloomberg data, Goldman Sachs, ICAP, JPMorgan Chase and UBS are all buying 21Shares Polkadot ETP for customers.

Citigroup and UBS are still in a state of indecision. Itay Tuchman, head of Citi’s global foreign exchange business, told the Financial Times that since August last year, the bank has seen a surge in interest in cryptocurrencies from major customers, and Citi’s provision of trading, custody, and financing services is already under consideration. middle. Tuchman said that Citigroup is not in a hurry to make a decision, “When we are confident that we can create products that are beneficial to customers and that regulators can support, we will enter the (cryptocurrency market).”

Wall Street banks have entered the cryptocurrency market: they are still cautious in the face of regulatory pressure

UBS stated in a report that cryptocurrency is a speculative asset, not a currency, and regulation is just one of its many drawbacks. UBS reminded that the recent plunge in cryptocurrencies highlights the volatility and speculative nature of this relatively new asset class and is not suitable for inclusion in investors’ portfolios, and recommends that customers be cautious in crypto speculation.

Behind the rush of Wall Street financial institutions to enter cryptocurrency services, they coincidentally mentioned the ever-increasing customer demand. In the future, banks that are hesitant to enter the cryptocurrency field may eventually be forced to respond to growing customer demand. Cryptocurrency has developed into a force that Wall Street giants cannot ignore.

The US second-quarter earnings report has recently kicked off, and many companies have increased their holdings of Bitcoin in various ways. For example, the wealth management company Edge Wealth Management disclosed the ownership of 54,134 shares of Grayscale Bitcoin Trust (GBTC) in its 13F-HR form filed with the U.S. Securities and Exchange Commission (SEC), an increase from its 37,605 shares held in April. 43.95%. Since April, Rothschild Investments, a multi-billion dollar investment company, has quadrupled its exposure to Bitcoin. ARK Fund bought more than 10 million U.S. dollars of GBTC. The New Jersey pension fund invested $7 million in Bitcoin mining stocks. Due to the support of market funds, Bitcoin has rebounded rapidly from below 30,000 to around 34,000 recently.

Wells Fargo, Citigroup, JP Morgan Chase, Goldman Sachs, Morgan Stanley and Bank of America made their appearances at the Senate Banking Committee and House Financial Services Panel meetings.

Wells Fargo CEO Charles Scharf said in his speech: “We continue to pay close attention to the development of cryptocurrency. Although the position of cryptocurrency as a currency and payment mechanism is still unstable, cryptocurrency has emerged as an alternative investment product.”

Author: Amy Liu

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/wall-street-banks-have-entered-the-cryptocurrency-market-they-are-still-cautious-in-the-face-of-regulatory-pressure/
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