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Last Updated : May 09, 2019 07:40 PM IST | Source:

Here's how banks can safely do Cryptocurrency

Signature Bank and J.P. Morgan have officially announced they are supporting cryptocurrencies

Moneycontrol News @moneycontrolcom

Two large banks, Signature Bank and J.P. Morgan, have officially announced they are supporting cryptocurrencies and each has implemented a closed-loop solution. A new research report from Researchandmarkets, titled How Banks Can Safely Do Cryptocurrency, evaluates the state of cryptocurrencies and considers multiple solution types based on how they fit the existing regulatory structures and evaluates where each solution will push the boundaries of institutional risk.

The report defines and delineates between virtual currencies, digital currencies, cryptocurrencies, private cryptocurrencies, “stablecoins,” and initial coin offerings (ICOs). It explains the risks associated with different cryptocurrency implementations and provides a graphic that makes it easy to comprehend how cryptocurrencies can be called, on the one hand, as the most secure currency in the world while, on the other hand, the news almost weekly reports new criminal acts in which people’s cryptocurrency has been stolen.

The report also highlights that different approaches can be taken by a bank to deliver a cryptocurrency-based product to its customers while remaining compliant to all existing banking regulations.

“Although I have confidence in the server technology that creates and manages Bitcoin, I remain very skeptical of the industry that has sprung up around it that has enabled so many poorly secured products to be released to consumers. Too many of these were scams to begin with. These are well documented in this report and the risk vectors are exposed,” comments the author of the report. “However, this report also identifies several implementations that remain well within the banking regulatory framework and would deliver meaningful products to market should the institution feel its customers could benefit from such a contribution.”

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First Published on May 9, 2019 07:40 pm
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