One reason banks are hesitant: Cryptocurrencies are still in regulation purgatory.
The US government, for example, can’t decide what they are. As currencies they face very little regulation. But as securities, such as stocks and other investments, they would face a different level of scrutiny.
The case, which is ongoing, suggests XRP is a security and not a currency, because otherwise securities law wouldn’t apply. Ripple rejects that label.
Cases like that, paired with the huge regulatory uncertainty for other big cryptocurrencies, make it hard to get involved for banks, which are regulated to the bone.
“Undoubtedly, the Ripple action was an example of the regulatory dark cloud that could potentially hang over cryptos other than Bitcoin or Ether,” Ashley Ebersole, a partner at law firm Bryan Cave Leighton Paisner and former SEC attorney, told CNN Business.
Regulatory uncertainty is scary for companies looking to jump on the crypto bandwagon. But eventually, banks will likely be able to get on board.
Goldman Sachs CEO David Solomon said on the company’s earnings call in April that the rapid rise of cryptocurrencies signals that “there will be significant disruption and change in the way money moves around the world.”
“We need to operate within the current regulatory guidelines,” Solomon said during the earnings call. “For example, we cannot own Bitcoin or trade it as principal.”
Digital currencies should best be thought of as a new financial product banks are getting involved with, Ebersole said. “Does it require new and different financial control? Probably.”
To be sure, big Wall Street names have already made money on the most recent bout of crypto-mania. Goldman was the lead bank for Coinbase’s direct listing, for example, which means the company reaped the highest fees for their investment banking efforts.
Social media is a lifeline for Indians. And a threat for Modi
Recently, however, the group has been flooded with posts from users looking for hospital beds, oxygen and medicines, as a devastating second wave of Covid-19 sweeps across India.
But even as Indians turn to social media during one of the country’s darkest hours, Prime Minister Narendra Modi seems to be cracking down on the major platforms in an attempt to stifle dissent. Last month, Twitter removed several tweets about Covid-19 at the request of the Indian government, including some that were critical of the prime minister’s handling of the pandemic.
In a statement last week, India’s Ministry of Electronics and Information Technology said it had asked Twitter, Facebook and others to remove around 100 posts by users it accused of spreading fake or misleading information.
New Delhi’s intervention has put the social media companies in a difficult position in one of their biggest markets, wedged between their users and a government that recently introduced new rules that could make them liable for not removing controversial posts.
Pratik Sinha, co-founder of fact-checking website Alt News, said he does not buy the government’s explanation that it was going after fake news. “There are hundreds of thousands of posts with fake news on social media during the pandemic, why take down only these 100 and let the others stay,” he said.
Monday: Earnings from Estee Lauder, Avis Budget and Suncor Energy; US ISM Manufacturing Index
Tuesday: Earnings from ConocoPhillips, CVS Health, DuPont, Marathon Petroleum, Pfizer, Sysco, Under Armour, Activision Blizzard, T-Mobile US and Virgin Galactic
Wednesday: Earnings from General Motors, Hilton, Jones Lang LaSalle, Allstate, MetLife, Maersk and PayPal; US crude oil inventories
Thursday: Earnings from Anheuser-Busch InBev, ArcelorMittal, Moderna and Volkswagen Group; US unemployment claims
Friday: Earnings from Siemens, Adidas, IAG, Credit Agricole, BMW and Cigna, US jobs report for April
You may also like
Afghanistan: Civilian casualties hit record high amid US withdrawal, UN says
How Taiwan is trying to defend against a cyber ‘World War III’
Pandemic travel news this week: Quarantine escapes and airplane disguises
Why would anyone trust Brexit Britain again?
Black fungus: A second crisis is killing survivors of India’s worst Covid wave