Some executives from major US banks have taken a cautious approach to cryptos, regardless of President-elect Trump’s crypto-friendlier stance and pro-crypto promises.
Speaking at the Reuters NEXT conference in New York, bankers stressed that they are still skeptical about the regulations surrounding the asset class.
David Solomon, Goldman Sachs Chief Executive, told Reuters that the crypto regulatory framework “has to evolve”.
“Everyone’s speculating as to how that regulatory framework will evolve, but it’s still unclear.”
The President-elect, Donald Trump, branded himself as a pro-crypto president, making several promises, including a strategic national crypto stockpile.
Recently, Trump nominated seasoned Washington attorney Paul Atkins to chair the SEC, a move welcomed by the crypto community. Meanwhile, venture capitalist and ex-PayPal COO David Sacks has been nominated as Trump’s administration’s “AI and crypto czar.”
Despite all these developments and the regulatory easing, banks are not in a rush to “head-first into the volatile asset.”
Solomon further said that Goldman Sachs would first “evaluate” dealing with highly speculative assets like Bitcoin if the rules change. Additionally, he stressed that the banks’ ability to act in these markets is “extremely limited at present.”
Another banker, Robin Vince, CEO of the Bank of New York Mellon, stressed the need for appropriate guard rails before developing anything new in crypto policy. Any new regulations must be “battle-tested through a few macroeconomic cycles,” he added.
“We’ve seen a couple of cycles already in crypto. We’ll have to see how some of these assets evolve.”
Past Crypto Turmoils Hold Back Bankers from Dealing With Crypto
The biggest crypto turmoil in the crypto industry – the FTX exchange debacle – has left bankers uncertain about dealing with cryptos.
Bank regulators have also become more vigilant after last year’s collapse of lenders Silvergate and Signature Bank.
“One of my biggest fears for any administration is that they forget the lessons that we were meant to have learned from many previous crises,” Johnson noted. Johnson also said that Client demand for crypto remains limited, even with regulatory easing.
Matt Gellene, Bank of America’s head of Consumer Investments and Employee Banking & Investments agreed to johnson.
“Bank of America offers some clients exposure to cryptocurrencies via exchange-traded funds, but there was ‘not an overwhelmingly large amount of interest.’”
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