The emergence of cryptocurrencies and its services across financial institutions and banks have sent shock-waves throughout the financial markets.
It is anticipated that cryptocurrency banking will become an integral part of the financial industry because of its impressive uptake.
It is a massive development to traditional and centralized banking setups. Cryptocurrency services guarantee more efficiency, transparency, security and reduced bureaucracy.
A recent such development that flooded the crypto media is the announcement by a Swiss-based bank – Basler Kantonalbank (BKB). It tiptoed into crypto territory by confirming to offer cryptocurrency investments and services through a subsidiary.
According to a Swiss daily, BKB announced that its subsidiary, Bank Cler, is working to offer these products in response to an increased demand for cryptocurrency services in the nation.
“In the BKB Group, we are working to offer our clients a solution for the trading and deposit of selected cryptocurrencies. As an established regional (Basler Kantonalbank) and indeed national (Bank Cler) banking group, we wish to give our clients secure access to these new financial products,” a BKB representative told CoinTelegraph.
Switzerland has become a hot jurisdiction to operate cryptocurrency exchanges and services, passing numerous laws over past years, to support the crypto industry.
This is because the country is looking into ways at which there can be some sort of merger between the banking and cryptocurrencies. One way to achieve this is enabling banks to accept cryptocurrencies as payments or make them accessible at least.
Smaller banks such as Seba, Sygnum and Vontobel are already providing crypto services in the country. Seba for example, offers crypto services such as asset management, trading, custody, among others. The bank was also recently selected by Banque de France for experiments with central bank digital currency (CBDC).
Though BKB haven’t specified what type of cryptocurrencies will be available; with such a move, bank customers will be able to invest in both traditional and digital assets, store them, trade as well as take out loans.
Banks across the globe are also moving in similar direction, with JP Morgan, latest to lead. The American banking giant said that it will begin offering bank accounts to Gemini and Coinbase cryptocurrency exchanges.
It is impressive to see how banks and financial institutions have realized the importance of cryptocurrency services over time. Even those who considered cryptocurrencies as a bubble and a risky investment are surprisingly looking at its growth and turning to offer crypto services.
Two key reasons that banks are jumping into cryptocurrency services are speedy transactions and lower costs. As cryptocurrencies are peer-to-peer, they eliminate third party agencies and middlemen, thus eliminating bottleneck issues.
Dong He, deputy director of the IMF’s Monetary and Capital Markets Department, wrote in an IMF post stating that unlike bank transfers, crypto asset transactions can be cleared and settled quickly without an intermediary.
“New services using distributed ledger technology and crypto assets have slashed the time it takes for cross-border payments to reach their destination from days to seconds by bypassing correspondent banking networks.”
There are both challenges and opportunities for crypto services in the digital age. As a result of these not being recognized across the global marketplace, it is crucial to develop a standardized approach for their use.
As regulations are still in its infancy, it creates a lot of inhibitions among the larger financial industries towards the adoption of crypto services. Banks must stay in the game in a digital, sharing, and decentralized service economy in order to seamlessly issue crypto services.
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Sujha has been writing and reporting on cryptocurrencies and blockchain technology developments since 2014. Her work has appeared in CoinDesk, CCN, EconoTimes and Fintech News Malaysia. She is also an accomplished Indian classical singer and loves baking cakes.
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