Former Citigroup CEO Vikram Pandit has suggested that large banks will likely consider offering cryptocurrency trading services in the near future.
Speaking to Bloomberg’s Haslinda Amin during the Singapore Fintech Festival event, Pandit, said the shift will likely occur in the next one to three years, with securities firms joining banks to venture into cryptocurrencies. He noted that the benefits that come with cryptocurrencies would compel leading banks to venture into digital currencies.
“My big hope is that central banks around the world understand the benefit of a central bank digital currency, and move on to accept, adopt them. Moving money around the world while trying the modernise a paper-based banking system is “cumbersome” and creates a lot of “deadweight” costs,” Pandit said.
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His projection follows months of growth in the crypto sector, with assets like Bitcoin hitting an all-time high price of above $65,000. At the same time, the entire crypto market has attained a market cap of $3 trillion. With the growth, leading banks have begun offering crypto-related services capitalizing on demand from consumers.
Goldman Sachs has started trading crypto futures with the Commonwealth Bank of Australia, planning to enable clients to buy, sell, and hold crypto assets. The potential shift has also seen banks like Goldman Sachs, Wells Fargo Fidelity, and JPMorgan hire experts in the field.
Role of CBDCs
Furthermore, central banks globally are getting involved in crypto by launching digital versions of their local currencies. A section of banks is already researching the viability of CBDCs, with Nigeria among countries that have unveiled digital currencies.
Pandit, the chairman of The Orogen Group, also notes that CBDCs will be a crucial component of banks’ involvement in the crypto sector.
At the same, various financial players are setting up infrastructure to aid banks in offering crypto services. As we previously reported, Mastercard (NYSE: MA) has partnered with Bakkt to enable banks and merchants on its network to integrate cryptocurrency solutions into their systems.
Through the partnership, Mastercard aims to enable partners to buy, sell and hold digital assets through custodial wallets provided by Bakkt.
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