Crypto’s Decentralization Threatened By Big Banks

Demissie stated that digital assets are becoming increasingly part of the mainstream and they are here to stay. BNY Mellon is expected to be the trusted service provider to our clients, extending its core services to the emerging asset classes. So far, while including digital assets with traditional financing might be a big step forward for the crypto ecosystem, you may wonder if crypto-assets decentralization will be threatened by the big banks.

However it’s an appropriate concern as many institution and retail crypto assets holders preferred to store their assets with the custodians, it’s irrelevant whether it is a big bank or crypto-native custodian such as Gemini, someone else will be holding your keys, pointed out by Tapscott. Although Tapscott also remarked that it doesn’t stop millions of crypto holders from becoming their own bank or storing the coins in a hardware wallet.

Head of business development at Ownera which a market digitalization firm, Anthony Woolley, also further clarify this matter and told that entity is always required by regulations for example any security ownership record is accountable by a transfer agent. Woolley believes that digital securities could not be fully decentralized while being with regulatory requirements.

Although, Woolley proposed that it might be possible to think of digital securities regulated if peer-to-peer instant payments transacted including settlement with the transfer of ownership. He believes that society and investors require this type of decentralization as a whole.

A former global bank City trading executive Matt Zhang, who is also a founder of $1.5 billion multi-strategy fund Hivemind Capital Partners which is designed to support the institutionalization of crypto investing, told that banks have very high regulatory standards to develop in regards to products and services, where custody of crypto is the most complicated of all.

Last year research released from banking survey and NYDIG’s Bitcoin shows that customers prefer to access Bitcoin through an offer via their banks which are consistent with their quality standards and risk management. The research findings are also showing that 71% of Bitcoin holders would be switching their primary banks with the ones which are offering products and services related to Bitcoin. Brewster stated that those Banks which are not preparing to offer Bitcoin-related products and services are at risk of being left behind.