55% of world's top 100 banks invest in crypto and blockchain, study finds
55% of world's top 100 banks invest in crypto and blockchain, study finds By Editor DiarioBitcoin

A Blockdata

report reveals that more than half of the 100 largest banks by assets under management are investors in cryptocurrency and blockchain-related projects.

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Banks seem to have more to do with crypto than we think, or so reveals research from Blockdata, a Blockchain

market intelligence outfit.

According to the firm, 55 of the top 100 banks by assets under management (AUM) have some form of exposure to the new technology. This involvement reportedly cuts across direct and indirect investments in decentralized accounting and crypto technology companies by the banks themselves or through their subsidiaries.

The most active investors based on the number of investments in Blockchain companies are Barclays (19), Citigroup (9), Goldman Sachs (8), J.P. Morgan Chase (7) and BNP Paribas

(6).

Blockdata

highlights that in most cases, they have not been able to determine how much money these banks have invested, as they participate in funding rounds with several or many other investors.

“As a proxy for this, we can look at the valuations of the rounds they participated in. Based on this, the active investors in the largest funding rounds are Standard Chartered ($380 million in 6 rounds), BNY Mellon ($320.69 million in 5 rounds!) ), Citigroup ($279.49M in 9 rounds), UBS Group ($266.2M in 5 rounds) and BNP Paribas ($236.05M in 9 rounds),”

the study said.

Crypto Custody

Explains that they also analyzed what Blockchain companies the top 100 banks are investing in, what use cases they are working on, and what industries they are happening in. “The most notable example of where banks are investing is crypto custody,”

he reveals.

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He adds, “Despite being very vocal about how bad Bitcoinsupposedly is, many of these banks can’t ignore the potential revenue streams and the importance of having a strong strategic position in the cryptoeconomy. According to our findings, 23 of the top 100 banks by assets under management are either creating custodial solutions or investing in the companies that provide them.”

He explains that custodians offer financial services to look after their clients’ funds for a fee. They either build their own technology to provide this service, or

use a technology provider whose solutions they can integrate into their own systems.

The ones that convinced banks

Indicates Blockdata that there are 3 main developments that convinced many major banks to start providing cryptocurrencies, and mainly Bitcoin-related services:

  • See crypto exchanges that with a fraction of their staff become substantially more profitable or valuable than many banks. “This started as early as 2018, when Binance, the leading exchange at the time, recordedUSD$54 million more profit than Deutsche Bank, with only 200 vs 100,000 employees. More recently, Coinbase’s valuation was higher than Goldman Sachs, with only 4% of its employees.”
  • Countless requests from its customers to provide Bitcoinsolutions.
  • A change in regulations in 2020 that allows banks to offer cryptographic custody solutions.

For Blockdata, the fact that many banks are now trying to provide these services after years of warning their customers against using cryptocurrencies and specifically Bitcoin, “is probably one of the most ironic developments in the Blockchain and cryptocurrency space.” He believes that in addition the crypto world will gain new users who prefer the custody of banks and not handle their cryptocurrencies themselves.

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Sources: Blockdata y Cointelegraph

Translation and version by DiarioBitcoin

Image by Unsplash