Despite the instability of cryptocurrency, major U.S. banks are considering a move toward supporting these emerging currencies, Reuters reported. However, they are being rightfully cautious given the shifting legal landscape and how easy it would be to run afoul of laws designed to keep our financial systems honest.
Reuters spoke to industry executives about the possibility and revealed that internal discussions are already happening regarding the potential change. However, no bank wants to make the first move.
“When I look at the bitcoin universe, the leverage in the system, the misuse in the system, the money laundering issues, trafficking, I’m not a fan of it,” said Jamie Dimon, CEO of the largest U.S. bank, JPMorgan Chase, per Reuters. “We’re going to allow you to buy it, we’re not going to custody it. … I don’t think you should smoke, but I defend your right to smoke. I defend your right to buy bitcoin.”
It’s not surprising that banks have their eye on this move. President Trump has courted cryptocurrency enthusiasts with promises to create a federal cryptocurrency reserve and make other investments as president.
However, it’s also not surprising that they’re hanging back. The risk is high, and anti-money laundering rules and other regulations could sharply limit their activities, with no guarantees yet as to how those rules may change. When banks do enter the game, it will likely be in small ways, as partners to existing organizations. They may also want to create a stablecoin of their own.
It’s in the best interests of the American public for legal protections regarding cryptocurrency to be strengthened and for banks to be cautious. All the computing power needed is bad for the environment, at least until we switch to a more eco-friendly cryptocurrency.
In the meantime, until banking regulators speak up, we’re unlikely to see much change in crypto banking.
