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Why Are Banks More Interested in Crypto?

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If you’re an observer of the financial markets, then you won’t have had much trouble noticing that the path the cryptocurrency has trodden in 2022 was a testament to its volatility. If you were to create a Bitcoin word cloud for the first half of this year, the word “crash” would likely appear in it. So far, this has been the perfect year for some skeptics to crow loudly that they were right all along about digital coins. But one group of people who are not participating is the banking world. That should be enough to pause for a moment.

If bitcoin and all other cryptocurrencies, to use a metaphor, were circling the drain, then surely banks would be pulling out of the whole area. But since the beginning of the year and in the last few weeks, let alone months, conventional banks have invested time, money and effort in cryptos. So they must have a reason for this interest: it just wouldn’t make sense for them to take big risks in the context of financial uncertainty like the one we’re experiencing around the world. What Makes the Banks Take Bold Actions in the Crypto World?

It’s a way of retaining talent

Many people feel that cryptocurrency is now experiencing some bumps due to its relative youth as a financial asset class, and when it breaks out of that spell it will be more dynamic as a result. That makes it particularly attractive for the younger heads on Wall Streetwho are interested in gaining a foothold in a growing market. They could lead their own startup, or the banks could bring them into a crypto project that they believe has the potential to merge the novelty of digital currency with the experience that only a top bank can bring. So, branching out into the crypto sphere is a way of keeping promising people around.

It’s a chance to shape the future

From sending money to people under oppressive regimes to placing bets in a crypto casino, the versatility of cryptocurrency is an advantage that banks recognize. That versatility could be placed in the hands of others, or the banks could help make it work for them. It’s hardly a surprise that the names and institutions that have been so dominant in finance want a hand in deciding the direction of a newer asset class. Of course, there’s no guarantee it’ll work out the way they expect – Bitcoin and co. have come this far without centralized funding – but the banks will always want a piece of the action.

You go where customers are

Banks don’t become big financial institutions by ignoring what customers are doing, and when a bank sees thousands of its customers transferring funds to crypto exchanges, it’s a no-brainer for the bank to explore this field. For some clients, the first time they’ve ever invested wisely will come via the crypto sphere – so it makes sense that banks would offer them the option of guided investing. Offering their existing customers a path into crypto is a chance for banks to gain a foothold in the crypto world. You can view crypto as either a competitor or another vertical, and it makes sense to take the latter approach.

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