Cryptocurrency in banking system
As the value of digital assets rose, they became increasingly popular among asset management companies. Cryptocurrency is believed to become a long trend and a new phenomenon in the financial sector as the U.S. Office of the Comptroller of the Currency has authorized all national banks to provide custodial services for cryptocurrencies. It was reported in an open letter from the regulator to market participants. Therefore, in the article, we will consider the prospects of further development of the cryptocurrency market.
First of all, any activity related to buying, selling, exchanging, and exchanging cryptocurrencies carries a large number of risks that should be taken into consideration before conducting transactions with cryptocurrencies as it is hardly possible to predict the trend movement. All those who are going to invest in cryptocurrency should be aware that the cryptocurrency industry is quite unpredictable in both good and bad senses. In other words, crypto-currency price fluctuations can be profitable for traders despite their volatility.
Moreover, it is believed that cryptocurrency finds its place in many areas of human activity and attracts the interest of large investors since more and more banks and financial institutions all around the world equate crypto-currency with traditional assets and facilitate investing in cryptocurrency. Analyst companies Xangle and Hanhwa published the research, according to which banks around the world may gradually increase the list of transactions with digital assets during this year. Banks are expected to integrate crypto-currency into their systems first. However, it could also mean a strengthened system of user verification since the identification for cryptocurrency users could take place directly at banks and possibly even government agencies.
Further, there is a possibility that banks will create their custodial wallets for users with digital assets. For instance, one of America’s oldest banks, the Bank of New York Mellon (BNY Mellon), will begin storing and making transactions in Bitcoin and other cryptocurrencies for its asset management clients. According to The Wall Street Journal, the bank has developed a prototype platform that will allow future transactions with cryptocurrencies in the same way as with traditional assets. To incorporate digital currencies into their infrastructure, Wall Street banking institutions need to make efforts from the perspective of addressing regulatory and legal risks to provide financial stability. However, with the rising value of cryptocurrencies, digital assets are becoming increasingly popular with asset managers, hedge funds, and other institutional investors.
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Valentina BEREZA, Team bit4you
