Bank Of America Is Wary Of Cryptos
Bank of America stated in its annual report that cryptocurrencies pose a threat to its business operations. That’s because its clients might start dealing with “other market participants…who engage in business…in areas we deem speculative or risky, such as cryptocurrencies”, according to the bank. Furthermore, the large financial institution, which currently ranks 2nd on the list of largest banks in the United States in terms of total assets, says that its revenue could be “negatively” due to competition from the crypto industry.
The bank is also concerned that its existing clients might take their business elsewhere, because it might not be able to offer them the crypto-related services they’re looking for. These statements from Bank of America were included in a 10-K filing submitted to the U.S. Securities & Exchange Commission (SEC). Moreover, the detailed report covered the bank’s various business operations and their associated risks.
Concerns About Embracing Change
Although Bank of America didn’t provide additional comments regarding their concerns about digital currencies, its extensive report did mention that, “Emerging technologies, such as cryptocurrencies, could limit our ability to track the movement of funds“. Additionally, the dominant financial institution expressed concerns that mainstream adoption of digital currencies could force it to make significant adjustments to its current business model. This would be necessary because the emerging crypto-market might introduce new market standards and greater variations in consumer behavior, according to the firm.
In order to adapt to these imminent changes and remain a major player in the investment banking market, Bank of America believes that it will have to bear “substantial expenditures”. Presumably in an effort to avoid additional operating costs, the company has put up a fair amount of resistance when it comes to emerging technologies such as cryptocurrencies. Notably, Merrill Lynch, the bank’s wealth management division, ordered its financial advisors not to provide bitcoin-related investment services. Furthermore, the bank has also prevented its credit cards from being used buy cryptocurrencies.
Conducting Research On Blockchain Technology
While not taking a crypto-friendly approach, Bank of America, along with other financial institutions, has been actively researching blockchain technology. In fact, it has registered over 70 patents related to blockchain-based solutions for online wallets, identity/credentials verification, and various other banking procedures. The acquisition of these patents has been confirmed through an official email by the bank’s SVP for Corporate Communications, Mark Pipitone.
Financial institutions are not alone in taking a keen interest in distributed ledger technology. Given its potential to be applied in numerous business practices and industries, even the education sector has been developing blockchain-enabled services. One particular company, BitDegree, attempts to offer what it calls the first free “blockchain-powered online education platform”. Not only is it free to learn, but you also get rewarded for it with BitDegree’s BDG token.
Based on these developments, it seems that cryptocurrencies and their underlying blockchain could drastically change how organizations work. It could also just be a matter of time that Bank of America decides to change its stance on digital currencies.