Bitcoin and the Banks

A few weeks ago, JP Morgan’s CEO, Jamie Dimon threw some punches at Bitcoin. He said it was a fraud that ‘will eventually blow up’. However, that is not the consensus on Wall Street, with many embracing the currency.

Case in point: last week, a rumour was floating that Goldman Sachs is considering trading cryptocurrencies. CEO Lloyd Blankfein later tweeted that he was undecided on Bitcoin, but he draws parallels between the naysayers on paper money displacing gold.

If the rumours are true, Goldman Sachs isn’t the first investment bank working on cryptocurrency projects. Fidelity Investments has launched a project in partnership with Coinbase. This project allows Fidelity Investment’s customers to track their cryptocurrency holdings alongside their traditional assets.

Morgan Stanley’s CEO James Gorman also said at a recent Wall Street event that Bitcoin was ‘more than just a fad’.

Whatever the individual banks’ feelings on cryptocurrencies, it is clear that time is being spent working out how it fits. If it wasn’t a major consideration, the CEOs of leading banks wouldn’t be wasting their breath or tweets on it.

Indeed, back in September the Bank of International Settlements said: “While it seems unlikely that bitcoin or its sisters will displace sovereign currencies, they have demonstrated the viability of the underlying blockchain or distributed ledger technology (DLT). Venture capitalists and financial institutions are investing heavily in DLT projects that seek to provide new financial services as well as deliver old ones more efficiently. Bloggers, central bankers and academics are predicting transformative or disruptive implications for payments, banks and the financial system at large”.

Cryptocurrencies going mainstream

And, Bitcoin and other cryptocurrencies are going mainstream, embedding the currency based on blockchain into the hearts and minds of consumers across the globe. Heavy hitters in business are putting their weight behind cryptocurrencies. And they are not just talking about it. Last month, we helped Knox Group, along with Baroness Michelle Mone launch the first luxury development available in bitcoin.

The evidence is there: we’re sure to see the banks start embracing cryptocurrencies in the near future. Those that fail to take it seriously may end up losing out.