Banks are showing caution on cryptocurrencies ahead of the COVID-19 testimony before the U.S. Senate

The top executives of Wall Street banks will appear before the Senate Banking Committee on Wednesday to discuss the role of their financial institutions in the recovery of the US economy..

Democratic lawmakers plan to interview several of the bank’s top executives, whose companies posted record profits during the COVID-19 pandemic when common Americans struggled to make ends meet.

In prepared testimonials published on Tuesday, The CEOs of Bank of America, Citigroup, and Wells Fargo described their respective banks’ responses to key challengessuch as inequality, diversity, climate change and taxes, as well as the way their banks handle cryptocurrencies.

Banks are showing caution on cryptocurrencies ahead of the COVID-19 testimony before the U.S. Senate
Banks are showing caution on cryptocurrencies ahead of the COVID-19 testimony before the U.S. Senate

This year there was a record bullish rally in the cryptocurrency markets as Large financial institutions have opened up to digital assetsAdding trading desks and custody services to manage customer interests in major cryptocurrencies such as Bitcoin (BTC).

In your testimony, Brian Moynihan, CEO of Bank of America, said the bank continues to evaluate the benefits, risks and customer demand for products and services related to cryptocurrency. “Currently we are not lending against cryptocurrencies or banking companies whose main business is cryptocurrency or facilitating trading and investing in cryptocurrencies,” he said.

Moynihan said that The BofA is also evaluating new technologies such as distributed ledger technology that could bring added value to the bank’s customers.. Although the BofA has more than 60 blockchain patents, the bank “hasn’t yet found a scale use case,” Moynihan said.

Similarly, Citigroup CEO Jane Fraser outlined a measured approach to cryptocurrencies The bank must ensure clear controls and governance before committing to cryptocurrencies. “Citi is focusing its resources and efforts on understanding the changes in digital assets and the adoption of distributed ledger technologies, including customer demand and interest, regulatory developments, and technological advances,” Fraser wrote.

Charles Scharf, CEO of Wells Fargo, said the company has been closely following developments around cryptocurrencies.. Digital assets “have emerged as alternative investment products, although their status as a currency and payment mechanism remains fluid,” said Scharf. The executive mentioned that too Wells Fargo is preparing to launch a pilot project for a blockchain-based payment service within the bank’s global branch network..

The Senate Banking and Financial Services Committees will also hear from the CEOs of JPMorgan, Goldman Sachs, and Morgan Stanley.. The latter two launched limited cryptocurrency services earlier this year, while the former are considering opening a cryptocurrency trading desk.

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