In crypto we trust

SINCE the beginning, banks have been cryptocurrencies' number one critic. With the support of their big brothers, the central banks, they have launched copious warnings to the investing public about concerns and risks associated with these types of digital assets. Concerns about cryptocurrency range from money laundering, terrorism financing, and fraud to privacy of user information. Furthermore, banks have pointed out that cryptocurrencies have no intrinsic value; hence, cryptocurrency investors should be prepared to lose their investments anytime.

However, it is ironic that these banks are now heavily investing in crypto and other blockchain-related companies. This information is based on the July 2021 report released by Blockdata, an Amsterdam-based blockchain research firm. The said report disclosed that 55 of the top 100 banks in the world by asset under management (AUM) have such investments either directly or through subsidiaries. Based on ranking, the report enumerated Barclays, Citigroup, Goldman Sachs, J.P. Morgan Chase & Co., and BNP Paribas as the top five most active investors based on number of investments in blockchain companies. It is also worth mentioning that 23 of the top 100 banks in the world by AUM are building custody solutions or investing in the companies that provide them. Banks earn fees as custodians of these digital assets. Though basis varies, custodianship fees are primarily based on the value and vulnerability of the asset. There, again, banks have found an oasis in the middle of a pandemic that otherwise would have dried the tanks.