U.S. banks have tapped readily into the crypto space with more than half of the financial institutions now offering digital asset services.
In its latest research, Bitcoin financial services company River revealed that nearly 60 percent of the biggest banks in the U.S. are now engaging with Bitcoin. Most institutions have either already provided such services or are planning to do so in the near future.
The increased adoption highlights how banks have moved from being crypto cautious to adopting digital asset services.
According to the research, the increasing demand from clients, the emergence of regulations, and the development of Bitcoin ETFs are the factors that have led to the integration of Bitcoin services by the banks.
Big U.S. banks step up Bitcoin push
The analysis looked at how the 25 largest U.S. banks are approaching Bitcoin, focusing on custody, trading, and related services.
The analysis found that interest is steadily growing across the digital asset sector with many banks having already rolled out Bitcoin-linked products, others have publicly announced plans to do so, and several are actively exploring new offerings as more clients ask for exposure to the world’s largest cryptocurrency.
KPMG research highlights banks betting on crypto skills to stay relevant
River’s research on banking giants adopting crypto comes as other research firms had previously highlighted the importance of crypto adoption for banks.
KPMG had stated in a 2021 report that banks that learn how to deal with crypto now are setting themselves up for the future. With digital assets becoming more mainstream, customers are demanding that their banks provide more than just simple banking services.
KPMG has also pointed out that the real profit-making opportunities lie in three areas. One area is to serve the needs of large crypto traders and provide them with trading and storage services, much like how banks serve hedge funds today.
The second area is to make profits from crypto lending and staking, where banks can charge fees to leverage assets. The third area is to make profits from payment services, which banks can offer through blockchain technology to transfer money quickly and at lower costs.
Even as the current growth momentum is maintained, banks that understand and capitalize on this trend will not only be following the trend but will also be remaining relevant in the ever-changing world of finance.
As the adoption of crypto increases, it is no longer the domain of tech-savvy individuals and online traders. To be able to remain relevant and useful, banks will have to undergo a transformation and offer crypto services as part of their mainstream services.
According to KPMG, banks’ understanding of crypto is no longer a choice but a necessity to be able to remain relevant in the future.