Investors are currently buying Bitcoin through a wide variety of crypto exchanges. Along with a number of similar companies, Coinbase is currently in a dominant commercial position. However, there is plenty of room for disruption in the crypto industry. Crypto still has room for small-scale innovators to shine. Throughout the world, many of the largest banks remain wary about crypto. This might well change in the near future. For the first time, conservative financial institutions are accommodating themselves to Bitcoin-based enterprise. About 300 banks are planning to get into the Bitcoin trading business in early 2022. These banks plan to roll out Bitcoin sales on their mobile banking apps. Experts predict that future bank customers will have universal access to crypto transactions. By this point, crypto has found a home in the Chicago Mercantile Exchange (CME). This critical derivatives market is currently engaging with Bitcoin on a continual basis.
More Traditional Financial Institutions Join the Bitcoin Party
Cutting edge financial services companies are now dealing in the crypto sector. Synovus and U.S. Bank are two entities that have jumped into the Bitcoin economy in a big way. The Oklahoma bank Vast Bank may well be the first nationwide bank to provide crypto services through a mobile app. Goldman Sachs recently executed the first over-the-counter cryptocurrency transaction by a major American banking corporation. The transaction was publicized by Galaxy Digital, the blockchain finance company that facilitated the transaction.
How Governments are Responding to the Bitcoin Opportunity
Many larger American banks have been cautious and conservative regarding Bitcoin. Some older institutions have limited their engagement to old-fashioned institutional trading services. A number of state governments are waking up to the potential of Bitcoin. These forward-thinking governments are coming up with ways to fit crypto into a traditional, legal framework. For example, Wyoming has passed statutes regulating digital assets. This makes it easier for Wyoming bank account holders to get involved in trading crypto. Wyoming also allows the presence the Special Purpose Depository Institution (SPDI), an innovative form of modern financial institution. The SPDI is allowed to house digital currency as well as fiat currency.
More than most states, Wyoming is doing its best to keep its laws updated for the times. As crypto enthusiasts raise awareness about digital assets, crypto awareness should gradually improve lawmaker decisions regarding digital currency. As of yet, American federal banking regulations are not inclusive towards crypto. Over time, it is almost certain that American laws will become more crypto-friendly. On a cultural level, crypto has become fairly tolerated in most developed nations.
Signature bank (SBNY) is another major bank currently increasing crypto development. SBNY is trading at a price 18 times its expected earnings for 2022. In this metric, SBNY is doing even better than U.S. Bank. The SPDI must have reserves to back all deposited cryptocurrencies. Because of fairly high interest rates, the entire banking sector is looking fairly profitable. It’s likely that financial institutions will continue to provide services for Bitcoin traders. After all, crypto trading is here to stay.