Categories: Bitcoin Business

Wall Street Banks Eye Custody as Perfect Entry Point into the Cryptocurrency Market

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While Wall Street Bank chiefs like Jamie Dimon might appear to be critics of the emerging asset class, their firms are reportedly examining ways of entering the market. Behind the scenes, notable names like Goldman Sachs and JPMorgan are considering providing robust custodial tools for the cryptocurrency market.

Wall Street Banks and Cryptocurrency Custodial Tools

Recently, Goldman Sachs announced that there were considering offering custodial services for cryptocurrency funds. If the plan does go through, it would mean a significant advancement for the still nascent virtual currency market. For one thing, it would provide a greater incentive for institutional investors to come into the market.

Many big-money players tend to stay away from cryptocurrency trading due not only to the volatility of digital currencies, but also the lack of trusted custodial infrastructure. Many of these institutional funds are required by law to keep their assets with a qualified custodian. Hence, they couldn’t even enter the market if they wished to do so.

Commenting on the emerging trend of big banks mulling the idea of offering custody services to crypto funds, the head of Coinbase Custody, Sam McIngvale, said that platforms are responding to the clamor by big money players for reputable names to enter the market. According to McIngvale:

People were saying: ‘Hey, we’re already holding bitcoin with you, we trust you, but we need more; we need a regulatory component, we need monthly statements, we need a different type of insurance.’

Many experts have identified the emergence of robust custodial tools as the next significant step in the evolution of the cryptocurrency industry. In fact, one of the biggest concerns of the SEC concerning the approval of a Bitcoin ETF is the lack of crypto custodial infrastructure on the ground.

Tentative Forays in Cryptocurrency Investment

Apart from considering custody solutions, major Wall Street banks are also looking at the actual virtual currency trading itself. The likes of JPMorgan and Goldman Sachs trade Bitcoin futures on behalf of their clients. Others are reportedly in the midst of developing crypto-focused products and services as well.

Wall Street, thus far, has refrained from completely dismissing cryptocurrency. While some CEOs regularly take to Bitcoin bashing, Lloyd Blankfein of Goldman Sachs recently declared that it would be arrogant to dismiss Bitcoin as a legitimate contender for the future of money as a medium of exchange, a store of value, and a unit of account.

Will Wall Street ever fully embrace cryptocurrency? Let us know your views in the comment section below.

Image courtesy of USA Today. PxHere

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