Banks are wary about cryptocurrency ahead of COVID-19 hearing before the US Senate.

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CEOs of major American banks are travelling to Washington to answer legislators’ inquiries about how they plan to boost the post-pandemic economic recovery.

On Wednesday, major Wall Street bank executives will testify before the United States Senate Banking Committee about the role of their financial firms in the American economy’s recovery.

Democratic senators intend to question a number of top bank executives, whose companies made record profits during the COVID-19 epidemic as ordinary Americans battled to make ends meet.

CEOs from Bank of America, Citigroup, and Wells Fargo highlighted their respective banks’ approaches to important concerns such as inequality, diversity, climate change, taxation, and how their banks manage cryptocurrencies in prepared testimonies released on Tuesday.

This year saw a historic bull run in cryptocurrency markets as large financial institutions opened up to digital assets, introducing trading desks and custodial wings to manage client interests in big cryptos like Bitcoin (BTC).

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In his testimony, Bank of America CEO Brian Moynihan said that the bank is continuing to evaluate the benefits, risks and client demand for crypto-related products and services. “Currently, we do not lend against cryptocurrencies and do not bank companies whose primary business is cryptocurrency or the facilitation of cryptocurrency trading and investment,” he said.

Moynihan said that BofA is also assessing new technologies like distributed ledger technology, which could potentially deliver value to the bank’s customers. However, while BofA holds over 60 blockchain patents, the bank still has “not found a use case at scale,” Moynihan said.

Similarly, Citigroup CEO Jane Fraser articulated a cautious approach to crypto, stressing that before participating with cryptocurrencies, the bank will need to have clear controls and governance. “Citi is directing resources and efforts towards understanding changes in the digital asset space and the use of distributed ledger technology, including client demand and interest, regulatory developments, and technological advancements,” Fraser wrote.

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Wells Fargo CEO and President Charles Scharf stated that the corporation has been actively monitoring cryptocurrency developments. According to Scharf, digital assets “have emerged as alternative investment products, though their status as a currency and payment mechanism remains fluid.” The executive also stated that Wells Fargo is prepared to launch a blockchain-based settlement service trial within the bank’s worldwide branch network.

The CEOs of JPMorgan, Goldman Sachs, and Morgan Stanley will also testify before the Senate Banking and House Financial Services committees. The latter two launched limited crypto services earlier this year, while the former is rumoured to be considering launching a crypto trading desk.

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