It looks like banks and financial institutions are still split right down the middle when it comes to cryptocurrency.
Many Banks Are Still Iffy on the Subject of Crypto
For the most part, the gap between both centralized and decentralized finance has been somewhat bridged over the past few months. After all, many banks have now been given the green light to offer crypto custody services to their customers, but how many are looking to do this willingly?
It appears many of them are still having second thoughts about digital currencies according to a new report. The document was commissioned by both RUSI and ACAMS through a partnership with YouGov. It contains approximately 566 individual responses from financial regulators across the globe, many of whom are responsible for monitoring and governing cryptocurrency exchanges and other monetary firms. Financial intelligence units have also provided information for the survey.
It looks like the primary concern amongst these institutions is that bitcoin and cryptocurrencies are widely utilized for malicious behavior. They are worried about bad actors and see bitcoin as a potential tool for funding terrorists, cyber attacks and other hazardous organizations. Many banks simply do not understand how best to mitigate risk and deal with the potential consequences that come with the darker side of bitcoin use.
Approximately 70 percent of the respondents listed criminal activity as their primary concern regarding digital currency use. Kayla Izenman – co-author of the report and a research analyst with the Center for Financial Crime and Security Studies – explained in an interview:
The crypto industry appears to have a great amount of confidence in its own abilities to counter and detect risk, whereas government doesn’t have nearly as much faith. Bridging the gap is essential, as all sectors agree that the use of cryptocurrency is on the rise, but we know there’s no clear consensus on domestic regulatory action, which risks opening the door to illicit activities.
Too Many Splits and Creases
Others taking part in the survey suggest that sanctions are far more worrisome than illicit operations. Rick McDonell – the executive director of ACAMS and the former executive secretary of the Financial Action Task Force (FATF) – mentioned in a statement:
The results of this survey give a unique global insight into how respondents from governments, financial institutions and the crypto industry itself think about cryptocurrency: its potential and its risks. Their views are well worth nothing as policy making and regulatory enforcement continue to take shape around the world.
What the document shows more than anything is just how much space still exists between standard monetary firms and regulators and the digital currency arena. Those in the survey siding with crypto suggest that the digital industry is still far more transparent that traditional transactions, though respondents in favor of standard institutions scoffed at this idea.