August 12, 2022

You’ve got the power? Legacy banks aim high with new crypto offerings


Reports that legacy banks like BNY Mellon and Deutsche Bank are becoming active in the cryptocurrency space, including through custody services, should come as welcome news for crypto investors.

Lost or misplaced private keys, after all, are a bane of the crypto world — just recall the Welshman who lost 7,500 Bitcoin (BTC), worth about $400 million today, when he landfilled his PC’s hard drive, forgetting it was the sole repository of his private key. Meanwhile, traditional banks are society’s safekeepers par excellenceso maybe they can improve the crypto user experience with regard to private keys at the very least.

But if major financial institutions are indeed getting involved with cryptocurrencies — and not just in the custody area, as investment bank Morgan Stanley signaled on Feb. 13 a future investment in Bitcoin — why now? Is it just the soaring price of Bitcoin? Or has the evolving blockchain/cryptocurrency industry reached a new level where it’s acceptable even to habitually cautious depository institutions?

It appears to be a confluence of factors. In the summer of 2020, the United States Office of the Comptroller of the Currency issued an interpretiveTitle: You’ve got the power? Legacy banks aim high with new crypto offerings
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Published Date: Fri, 19 Feb 2021 17:05:21 +0000