Banks still show interest in digital assets and DeFi amid market chaos
The cryptocurrency sector is the Wild Wild West in comparison to traditional finance, yet a number of banks are showing interest in digital assets and decentralized finance (DeFi). This year in particular has been notable for banks exploring digital assets.
Most recently, JPMorgan demonstrated how DeFi can be used to improve cross-border transactions. This came shortly after BNY Mellon — America’s oldest bank — announced the launch of its Digital Asset Custody Platform, which allows select institutional clients to hold and transfer Bitcoin (BTC) and Ether (ETH).
The Clearing House, a United States banking association and payments company, stated on Nov. 3 that banks “should be no less able to engage in digital-asset-related activities than nonbanks.”
While banks continue to show interest in digital assets, BNY Mellon’s 2022 Survey of Global Institutional Clients highlights increasing demand from institutions seeking access to digital assets through reputable custodians. According to the survey, almost all of the 271 institutional investors (91%) are interested in investing in tokenized assets. The survey also found that most of these investors are using more than one custodian, with 35% conducting business with traditional incumbent players.
The heightened demand from institutions seeking access to digital assets is one of the reasons why banks are showing interest in cryptocurrency and DeFi offerings.
Bobby Zagotta, CEO of Bitstamp USA — a cryptocurrency exchange founded in 2011 — told Cointelegraph that Bitstamp has received many inbound requests recently for their Bitstamp-as-a-Service offering, which allows fintechs and traditional financial institutions to give clients access to cryptocurrency.
“Last year, fintechs
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