Updated 04 Jun, 2021

CEOs of Major US Banks Urge Caution Over Crypto at Senate Hearing

 

US Banks

Key Takeaways:

  • CEOs of major US banks shared their opinions on cryptocurrencies and future plans for involvement in the market
  • The bankers said they evaluate the market and wait for regulations before they engage with cryptos

Why are Bank CEOs Urging Caution?

Chief executives of major US investment banks expressed their opinions on cryptocurrencies. They said that primarily the explosive growth that has taken the emerging market to new highs this year. Speaking before the Senate Banking Committee, the chief executives of the largest US banks urged for a cautionary approach to dealing in crypto assets. This could occasionally go through dizzying volatility.

The crypto-focused comments was led by three of the attendees. These were Bank of America’s Brian Moynihan, Citigroup’s Jane Fraser and Wells Fargo’s Charles Scharf. All three banks cast light on the lack of an overarching supervisor. According to their remarks, a regulator is needed to oversee market activity. He needs to make sure investors are protected when participating in the volatile environment.

Citigroup’s Jane Fraser said, “Before we engage with cryptocurrencies, we see it as our responsibility to ensure we have clear governance and controls in place.” Ms. Fraser also noted the bank is monitoring the space and is taking a “measured approach”.  In efforts “to understand changes in the digital asset space and the use of distributed ledger technology.” This includes demand and interest by clients, regulatory developments and technology advancements”.

Banks Continuously Monitoring Crypto Industry

Brian Moynihan of Bank of America highlighted it was getting more difficult to avoid taking steps toward cryptocurrencies amid growing demand by clients. In his words, the bank continues “to evaluate the opportunities, risks and client demand for products and services related to cryptocurrency”.

He also mentioned Bank of America is currently keeping distance from serving bitcoin-related businesses. “Currently, we do not lend against cryptocurrencies and do not bank companies whose primary business is cryptocurrency or the facilitation of cryptocurrency trading and investment,” he said.

Charles Scharf, the Chief Executive of Wells Fargo, said the bank is working on a pilot project on the blockchain network. It will allow “internal book transfers of cross-border payments within our global branch network.”

“We continue to closely and actively follow developments around cryptocurrencies.” “They have emerged as alternative investments products, though their status as a currency and mechanism of payment remains fluid,” Mr. Scharf commented.

The three investment bankers were joined by fellow colleagues Jamie Dimon of JPMorgan Chase, David Solomon of Goldman Sachs and James Gorman of Morgan Stanley. The Senate Banking Committee summoned the bankers for its annual oversight hearing of Wall Street firms.

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