One of the largest banks in the United States has launched a new digital assets unit to shape the future of banking and payments through stablecoins, digital currency, and asset tokenization.
Elsewhere, Bolivia’s new pro-market president is backing blockchain to tackle rampant corruption in public procurement.
US Bank’s digital asset dive
US Bancorp (NASDAQ: USB) launched the Digital Assets and Money Movement organization to spearhead its efforts in digital currency and digital payments. The new division will target emerging digital asset products, including stablecoins, asset tokenization, and digital currency custody.
US Bancorp, doing business as US Bank, is in a prime position to capitalize on the rise of digital assets and their integration with mainstream finance, says Dominic Venturo, the lender’s chief digital officer.
He revealed that the bank’s clients have increasingly inquired about “how digital assets can help them safely move money, store deposits and use tokenized assets, among other potential use cases.”
US Bank is the fifth-largest American lender and a systemically important financial institution in the United States.
The new unit is the latest move by the Minneapolis-based bank targeting the digital asset sector. Previously, it launched a custody product for digital currency, claiming to be responding to demand from its institutional clientele. It also invested in Securrency, an asset tokenization platform, alongside State Street and WisdomTree.
It joins other banking giants, including JPMorgan (NASDAQ: JPM), Goldman Sachs (NASDAQ: GS), Citi (NASDAQ: C), and BNY Mellon (NASDAQ: DMF) in expanding their digital asset activities as the sector’s mainstream appeal continues to skyrocket.
But while the banks infiltrate digital currency, some industry leaders and pro-crypto legislators are accusing the lenders of attempting to block their clients’ access to digital asset platforms.
They claim that open banking “is the foundation of innovation, competition, and choice in today’s digital financial system.” Yet, the big banks are rolling back the gains made in recent decades.
Open banking, protected under CFPB’s Rule 1033, allows consumers to freely share their financial data with any third party, enabling them to connect their bank accounts with services such as digital asset wallets, stablecoin rails, and more.
“We cannot allow a select group of the nation’s largest banks to dictate the future of American financial services. Therefore, we respectfully urge the Bureau to ensure any open banking rule facilitates fair competition in the marketplace and safeguards the future of innovation,” the groups wrote.
Wyoming Senator Cynthia Lummis has also joined the call for CFPB to protect the open banking system. In a letter to the board on October 21, she urged it to “finalize this rule as soon as possible.”
She believes that open banking paves the way for Americans to integrate digital assets with their banking accounts.
“Open banking is also critical to integrating digital assets into our economy by promoting competition and allowing consumers to provide their data to digital asset exchanges and stablecoin issuers to facilitate faster and cheaper payments,” the letter read.
Bolivia eyes blockchain to curb graft
In Bolivia, President-elect Rodrigo Paz has endorsed blockchain as a solution to combating corruption in the public sector.
In his manifesto, the new leader outlined 84 strategies he intends to rely on to revive the South American nation’s flailing economy. One is the implementation of blockchain and smart contracts in public procurement to “eliminate discretion in all purchasing processes.”
Bolivia is one of the most corrupt countries in the world. It scored 28/100 in the 2024 Corruption Perceptions Index by Transparency International, its worst score in over a decade, placing it 133rd out of 180 countries. According to the IMF, public procurement is one of the sectors most rife with corruption in government.
Besides blockchain in procurement, Paz’s other strategy is to include digital assets in a basket of resources he will tap to unify the exchange rate. Under his administration, Bolivians can declare their digital assets into a new national Exchange Rate Stabilization Fund, which the government will use to steady the local boliviano.
Paz is to be sworn in on November 8 as Bolivia’s new president, replacing Luis Arce, who has been in power since 2020. He secured 54.5% of the votes in the runoff against former President Jorge “Tuto” Quiroga a week ago and is set to become the country’s first conservative leader in two decades.
