Wall Street and cryptocurrency: Whichever way the big banks view it, digital assets are the future
The huge differences between the world’s banking establishment and the community-led cryptocurrency innovators have been bridged and finally a mainstream Tier 1 bank has taken the first step in fully accepting all manner of banking activities in cryptocurrency.
BNY Mellon, one of the world’s most prominent financial institutions may represent the traditional establishment of Wall Street, has become the first bank in the world to permit its clients to hold, transfer and issue digital currencies.
Whilst this decision has not been without internal opposition, it does mark a milestone in the development of cryptocurrency in that it is now very much part of the forging of the future of financial services and rather than railing against it which is what many banks did 10 years ago when it was viewed as a ‘them vs us’ assault on the control over the global financial system that banks were perceived to have held and a democratization of the world of finance into the hands of the public who would be able to control their own destiny.
Yesterday, one of BNY Mellon’s asset management associates, Insight Investments, demonstrated concern relating to Bitcoin’s suitability toward institutional investors, highlighting low levels of liquidity, governance challenges and, believe it or not, ESG risks, something we have all heard before from Elon Musk, whose infamous tweet relating to electricity usage when mining Bitcoin caused a $700 billion drop in the prices of the five most popular cryptocurrencies.
However, BNY Mellon, which is the world’s largest custodian bank, has been avidly offering custodian services for cryptocurrency since February this year, and has since expanded its remit toward providing services relating to all aspects of banking in cryptocurrency.
The internal tug of war between BNY Mellon’s crypto advocates and the investment managers who represent the old guard is representative of the traditional mindset vs those who are going to take financial services into the future, however despite Insight Investments’ intent on holding onto traditional methodology, the company’s head of currency trading did state that Insight believes that there will continue to be more and more cryptocurrencies launched which will attempt to rival Bitcoin, showing that even those who choose not to trade crypto whilst affiliated to the world’s first crypto-friendly Wall Street bank realize that it is an intrinsic part of the future of finance.
It is absolutely clear that cryptocurrency is the most influential and empowering asset class on the planet, and with a properly designed framework, such as a regulated exchange which has an EMI license as well as a cryptocurrency exchange license in order that it can act as a digital bank, along with full trading and custodian services, cryptocurrency is very much heading toward being the lifeblood of global financial markets as well as an empowerment tool for hundreds of millions of people worldwide.
By being a customer of a cryptocurrency entity which is regulated as an exchange, and which also holds an EMI license for electronic payments is a sustainable and advantageous way of participating in this clear direction of progress.
CoinMetro is fully licensed and regulated as a cryptocurrency exchange, also holds an EMI license, and has plans to develop a multi-lateral trading facility (MTF) within the next twelve months. The combination of these features positions CoinMetro as a challenger bank and a cryptocurrency exchange, all on one platform.
By making the news as the first global bank to allow all manner of activity in cryptocurrency, BNY Mellon is passively advocating the way forward for regulated cryptocurrency exchanges, despite the internal push by one of its currency solutions executives, therefore this represents a case of the banks beginning to finally realize that they have to join the leaders of the electronic financial services revolution that has matured over the past few years.
Clearly as the framework which supports cryptocurrency becomes more of a requirement due to the sheer demand for digital assets globally, it will be more essential than ever to choose a sustainable, regulated exchange with which to do business.