Wall Street Giants Dip Toes—Not Feet—Into Crypto Waters
America’s banking titans are finally whispering about digital assets—but don’t hold your breath for bold moves. Behind mahogany desks, JPMorgan and friends are playing it safer than a FDIC-insured savings account.
Subheader: All Talk, No Blockchain
Sources say exploratory committees have formed... and immediately hired three consulting firms to assess the risks. Because nothing screams ’innovation’ like a 12-month feasibility study.
One exec anonymously admitted: ’We’ll wait till BlackRock fully paves the regulatory road—then charge clients 2% management fees to ride their coattails.’ Classic finance.
Big Banks Hesitate to Venture Heavily into Crypto
According to the four unidentified executives, banks are still hesitant to be the first to expand more into crypto. They fear falling into difficulties in case of a change in rules.
Firms await to follow major banks venturing into crypto after a few test cases, they added.
The pro-crypto stance is encouraging for traditional lenders, said Dario de Martino, from A&O Shearman, M&A partner who works on crypto-related issues.
“But they are still approaching it with caution and viewing the changes in regulation as an opportunity to engage and not a free pass,” Martino added.
Traditional banking giants JPMorgan, Bank of America, Citi and Wells Fargo are considering a consortium-backed stablecoin to compete in the crypto space.#Stablecoin #Banks https://t.co/sWFJQ8R9oD
Lenders are Likely to Enter into Crypto Custody Through Partnerships
The sources further noted that some of the banks are keen on custody businesses to store and manage cryptos.
Bankers and executives noted that financial institutions are keen to enter custody businesses through partnerships with existing crypto firms.
The increased interest from lenders follows the rescind of controversial Staff Accounting Bulletin – SAB 121. Former SEC Chair Gary Gensler supported the bulletin, which placed certain accounting burdens on banks that made it difficult for them to provide custody services for digital assets.
The rule gained widespread criticism for asking banks that hold crypto to record them as liabilities in their balance sheets.
“Traditional banks are slow to adopt crypto due to its complexity,” Gadi Chait, Xapo’s Investment Manager, told Cryptonews in an exclusive interview. “So far, outdated infrastructure, regulatory uncertainty, and internal scepticism have hindered their ability to keep pace with the surging consumer demand for crypto-enabled banking services.”
According to Chait, interest from big banks is indicative of a broader trend associated with the institutional adoption of digital assets.
