Amid growing institutional interest in the digital asset space, Bank of America decided to create a cryptocurrency research group. The head of international research at Bank of America (BoA) Candace Browning announced this. But didn’t provide further details on the project.
Browning named digital assets as one of the fastest growing and emerging industries. BoA has extensive experience with blockchain and uniquely positioned to further explore this technology, she said.
Indeed, Bank of America has been interested in blockchain technology for years. In 2018, he applied for a blockchain patent for recording data from Internet of Things (IoT) nodes. This is just one of many similar patent applications filed by the company.
The creation of a new department will help the BoA to become a leader among other financial institutions
However, the creation of a new department that will exclusively deal with the study of cryptocurrencies will help the bank to become a leader among other financial institutions. The task force will be led by Alkesh Shah of BoA’s Strategic Development and Innovation Department. He joined the bank’s team in 2013, prior to which he worked at Morgan Stanley and Lehman Brothers, which collapsed in 2008. The group will report to Michael Maras, who leads Bank of America’s Global Fixed Income, Currency and Commodity Research.
Banks are increasingly paying attention to the digital asset market
Traditional banks are increasingly paying attention to the digital asset market. Thus, the American Morgan Stanley owns 28,289 shares of the Bitcoin trust (GBTC) of the investment company Grayscale, and also holds a block of shares in MicroStrategy, the largest holder of BTC among corporations.
Recall that in 2019, BoA tested distributed ledger technology (DLT) with Ripple. And in May of this year it joined the Paxos blockchain-based securities settlement network. However, when it comes to cryptocurrencies, some BoA analysts have criticized Bitcoin for its volatility.
The bank’s CEO Brian Moynihan said earlier that BoA will not serve digital asset firms.
Now the bank is gradually starting to change its attitude towards the cryptocurrency industry. Perhaps the reason for this was the active “immersion” of other banks in this industry. For example, JPMorgan is preparing to launch an investment fund for bitcoin, and Goldman Sachs is planning to launch trading in futures and options on Ethereum.
Recall that in March Bank of America announced plans to transfer part of the training programs for its employees to VR format. The financial institution will partner with startup Strivr, which develops virtual reality software. However, the Basel Committee on Banking Supervision said on June 10 that they plan to set the most stringent capital requirements for Bitcoin and other crypto products for any bank that wants to keep such on the balance sheet. The standards makers said the risks to financial stability would be significant if banks did indeed expand their offerings in the volatile cryptocurrency market.