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How crypto and blockchain made inroads into financial services in 2020

By Bonnie McGeer
December 29, 2020 9:00 PM

Government officials and many bankers are wary of digital currency because they fear bad actorscould find ways to take advantage.

But bitcoin is not going away, and blockchain technology and crypto are slowly but steadily becoming more embedded in the financial services industry.

Here are some of the key developments in 2020 that suggest how entwined these nascent sectors are with the future of banking — including new applications for the technology, the Federal Reserve’s interest in creating a digital currency, notable moves by Visa and Mastercard, major advances with regulatory acceptance, and the milestone achievement of several crypto firms securing bank charters.

A blockchain breakthrough at Credit Suisse. Will other banks follow?

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An innovative approach to settling trades pioneered by the bank and the tech firm Paxos Trust could start a wave of real-life use of distributed ledgers on Wall Street.

(Full story here.)

Mike Cagney launches blockchain for loan trading. Will banks go for it?

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The former SoFi chief's latest startup, Figure, has created what it says is a transparent marketplace for buying and selling assets. Some banks have embraced the technology, but other blockchain projects have stalled because lenders don't want rivals to see their data.

(Full story here.)

OCC allows banks to hold cryptocurrency assets for safekeeping

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Responding to an unnamed bank that had sought the opinion, the regulatory agency issued an interpretive letter clarifying that an institution's custody services can be used for cryptographic keys and other digital currency-related assets.

(Full story here.)

Banks are permitted to hold crypto assets. Will they?

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In July, the OCC issued a letter clarifying that federally chartered banks can store cryptocurrency assets for their clients. A recent global survey finds that many are wary of the risks.

(Full story here.)

What Mastercard's crypto plans signal for the future of digital payments

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Major payment companies have long looked on at cryptocurrencies as too risky to touch, but too tempting to ignore. Mastercard's latest move indicates that the card brands are ready to make a firm pitch for crypto spending.

(Full story here.)

Visa's digital dollar concept opens a door to central bank currencies

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The U.S. Patent office published a Visa patent application to create a technology gateway that could allow central bank currencies for any nation to be digitized.

(Full story here.)

Powell says Fed's digital currency should complement payments system

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Other central banks have considered phasing out cash as they explore digital currencies. Should the idea take hold in the U.S., Federal Reserve Chairman Jerome Powell said it would not replace the physical dollar.

(Full story here.)

JPMorgan Chase reorganizes blockchain units

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After selling the rights to its Ethereum-based technology, the bank is rebranding a venture related to cross-border payments and creating a new umbrella group to oversee all blockchain-related efforts.

(Full story here.)

BNP Paribas out front on digital asset storage

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National banks just got the OCC's go-ahead this summer to hold and transfer digital assets like bitcoin for customers, but the Paris-based bank has already vetted the technology needed to do the job.

(Full story here.)

How PayPal's approach to crypto breaks with precedent

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PayPal isn't the first company to open its platform to cryptocurrencies, but its technique is more hands-on than most payment providers.

(Full story here.)

Crypto exchange Kraken receives Wyoming bank charter

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The company, which left New York in 2015 to avoid its regulations on virtual currencies, has found a more welcoming state.

(Full story here.)

Avanti got a bank charter. Here's what's next on its agenda.

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Founder Caitlin Long says the blockchain bank plans to issue a virtual currency and help hedge funds and family offices trade digital assets now that it has a special-purpose banking charter in Wyoming.

(Full story here.)

Two cryptocurrency firms seek OCC approval to charter trust banks

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BitPay and Paxos are only the latest digital currency companies to pursue a national charter from the Office of the Comptroller of the Currency.

(Full story here.)

Northern Trust, Fidelity join small club managing crypto assets

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They're among a handful of companies willing to hold clients' digital assets for safekeeping. Many of their peers balk at the reputational and financial risks.

(Full story here.)

Quontic Bank launches bitcoin rewards checking with help from NYDIG

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The community bank and fintech are offering the first live bank account and debit card that offer rewards in the form of bitcoin.

(Full story here.)
Bonnie McGeer
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