Financial Institutions In A Race: Who Will Bring Crypto Trading To The Fiat Mass

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Subject of Ongoing Debate

To date, no other technology has been the subject of such fierce debate except cryptocurrencies. Regardless of which side of the fence you stand on, the rise in popularity of cryptocurrencies simply cannot be ignored.

13 September 2017 is a day that will live in infamy for being the day that that JP Morgan’s CEO, Jamie Dimon, called Bitcoin a ‘fraud’, and even went the extent of saying that he would fire any employee trading bitcoin on the company’s accounts.

Since then, a lot has happened in the world of Wall Street. Major financial institutions are now on a race to offer their clients the chance to trade cryptocurrency through their offerings.

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Goldman Sachs

On 2 May 2018, Goldman Sachs announced its plan to set up what appears to be the first Bitcoin trading operation at a Wall Street bank.

Rana Yared, one of the Goldman Sachs executive overseeing the creation of the trading operation, said:

“It resonates with us when a client says, ‘I want to hold Bitcoin or Bitcoin futures because I think it is an alternate store of value’.”

This view is a hark-back to its previous declaration in 2014 that Bitcoin was not a currency, and claimed that it was too risky for banking companies investors.

It does appear that Goldman has taken a long and winding path to get to where it is today, where it is now one of the top five most active corporate investors in blockchain technology.

BarclayRumorsRumours that Barclays Bank may open a crypto trading desk has been refuted thus far. Barclays Group CEO Jes Staley highlighted that compliance and regulatory barriers are their biggest issue and further said:

“Cryptocurrency is a real challenge for us because, on the one hand, there is the innovative side of it and wanting to stay in the forefront of technology improvement in finance. On the other, there is the possibility of cryptocurrencies being used for activities that the bank wants to have no part of.”

Nevertheless, it has been reported that Barclays is gauging institutional demand for cryptocurrency to determine if the new business model is feasible. The following statement was made by the bank:

“We constantly monitor developments in the digital currency space and will continue to have a dialog with our clients on their needs and intentions in this market.”

Morgan Stanley

It is trite that Morgan Stanley and Goldman Sachs have a long standing rivalry as the largest two stand-alone investment banks. On this front, it appears that Morgan is also rigorously stepping up its game when it comes to cryptocurrency.

An unnamed source associated to Morgan’s trading desk said:

“Truth be told this is the next arms race. Everyone is rushing into cryptos. Everyone. There isn’t a bank, a fund, a fund company, a former legend attempting to reclaim old glory, private equity, venture capital, lending, exchanges, consulting firms – everybody. It is the digital gold rush. And our firm wants to get there and pull as many levers as we can.”

In the same way, the owner of the New York Stock Exchange (NYSE) may introduce a trading platform that would allow investors to buy and hold Bitcoin.

On the topic of how most major financial institutions now have some sort of blockchain initiative within their company, Farzam Ehsani, a former blockchain lead at Rand Merchant Bank and now a co-founder and CEO of VALR told Cointelegraph:

“All banks are realising they need to get onto this Blockchain boat, I don’t think many banks necessarily understand where the boat is going, but they realise that this is a development that is taking off and that if they want to be on this journey that everyone is going on, they need to be on the boat.”

As the banking sectors rush towards cryptocurrency, this begs the question: “Who will win the race to bring crypto trading to the fiat masses first?”

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