There has been a consistent trend among traditional banks who are reportedly looking for ways to offer cryptocurrencies as services to their customers. Internal sources told the news outlet The Telegraph UK that banks are requesting as much data as necessary to begin the integration process. Other financial institutions are also reportedly in the same boat considering adding Bitcoin to their list of assets.
Banks weigh market risks
Meanwhile, banks are still weighing potential risk factors before diving in. This is especially crucial for banks, as their direct affiliations with the SEC require extra caution. Aside from market volatility, which has been featured as the main risk factors for institutions looking to invest in Bitcoin, money laundering is also a rising factor that newcomers need to analyze.
Sources at cryptocurrency startup Elliptic told The Telegraph that in addition to government agencies and cryptocurrency exchanges, the FBI is also among their list of clients, hence the importance of understanding the market thoroughly enough to avoid violate legal policies.
Financial institutions join the race
The growing interest in the inclusion of cryptocurrencies from financial institutions has increased dramatically over the years. Initially, many of these institutions were collectively bearish on cryptocurrencies due to their volatile status. But this year, the reception of these firms has clearly taken a more positive turn. PayPal, Mastercard and Visa announced plans to allow cryptocurrency payments for their customers.
Other payment platforms like Square have gone one step further by partnering with crypto groups to increase the number of millionaires, while also funding designers to make cryptocurrencies. While PayPal recently revealed that the company most likely won't buy Bitcoin for itself, Square is already deep in the game with a profit of 10% of its $ 50 million investment in Bitcoin.
Gen Z is the target audience
Essentially, banks will need permission from regulators to continue with their intended strategy. More importantly, banks must act quickly to maintain the interest of their target audience; generation Z.
Despite the fact that Gen Z is behind in the race for Bitcoin ownership, this generation of TikTok lovers has demonstrated a immense capacity to increase adoption in the market. Banks that are reportedly looking to mimic the footsteps of exchanges to appeal to this generation could bridge the gap between the fiat and crypto markets.