Banks are Still Far Away from Trading Crypto: Genesis CEO

blockchain.news:

Bitcoin will not receive the same amount of significance from banks any time soon as it has from individual investors, the head of the prime crypto brokerage Genesis Global Trading said.

The continued bearish sentiment has brought this point of view from regulators on digital assets.

Banks have so far only shown limited interest in the digital asset sector by investing in crypto startups or derivatives products, Genesis Chief Executive Michael Moro said.

“It is their best attempt at a proxy for participation in Bitcoin: For one, to make it look like they’re actually doing something,” Moro said on a panel at the Bitcoin 2022 conference on Wednesday: 

“But two, more importantly, their regulators at the bank-regulator level are looking over their shoulder at everything that they’re doing. They are very, very far away from being able to trade actual Bitcoin.”

There has been a steady growth in institutional adoption of cryptocurrencies since late 2020. Recently, banks, including Goldman Sachs Group Inc, have revealed crypto options trading for their clients. In October, the U.S. Securities and Exchange Commission (SEC) approved Bitcoin-linked futures products for the first time. However, the U.S. SEC has continuously rejected requests by banks and hedge funds to offer similar products tied to crypto spot prices.

In addition to regulatory issues, banks have stated that they are prevented from the custody of their own cryptocurrency holdings. In doing so, banks such as Standard Chartered Plc. have instead set up off-shoot units that can handle tokens directly.

Moro also added that banks believe that a “safer way” to tell regulators that they are not trading crypto is by servicing cash-settled products or offering synthetic