The crypto blockchain market has been very volatile recently, so we wanted to look into what banks have been investing in. We found that some of the banks we followed have been investing in things like cryptocurrencies and blockchain technology. There have been a total of 23 investments into blockchain and crypto-linked entities over the past eight months (August 2021 to May 2022). Six of these investment decisions were made by new investment advice, while the rest were investments made by returning investors, like Morgan Stanley, BNY Mellon, and Goldman Sachs.
Based on the number of blockchain investment deals that have been made so far in this cycle, KB Financial Group and United Overseas Bank are the most active cryptocurrency investors. Other major players include Citigroup, Citigroup, Goldman Sachs, and Commonwealth Bank of Australia. All of these organizations have participated in a number of blockchain investment deals and crypto investment deals. As they know what are cryptocurrencies and how to use them in crypto market. We can't always tell just how much money these banks have invested because they're part of a round of funding to where lots of different people are contributing.
The table below shows the total funding amounts for the rounds each company was involved in. This tells us who the biggest investors were in the biggest rounds of funding. As of May 2022, there were 61 banks that had invested in this space. This shows that the ecosystem is stable and that there is room for more banks to join in. This will help to promote the space and make it more successful in the future.
Banks That Have Made Investments In Blockchain Or Cryptocurrencies
Back in 2009, when Bitcoin was first introduced, many financial institutions were skeptical of its potential. They warned people who invested in it at the time that it was an unregulated and dangerous investment, as banks rely on centralized financial systems. However, over time, many people have come to see cryptocurrencies and blockchain technology as more efficient and convenient ways to make payments and transact. This is why banks are now starting to invest in them themselves. There were a lot of objections raised by traditional financial institutions when Bitcoin and ethereum first came out, but over time, many of them have started to invest in it. There are a lot of big banks around the world that are interested in cryptocurrency investments (crypto investors) and they offer better financial services to their clients than traditional banks would. Over the years, there have been a few regulations put in place that have stopped banks from investing in things like unclassified assets and cryptocurrencies, but that seems to be changing gradually. Let's check out the list of cryptocurrencies
The top banks that have invested in blockchain and cryptocurrencies to benefit from digital currencies are listed in this article.
Standard Chartered $380 Million and Six Investments: Standard Chartered announced in July 2020 that it is creating a cryptocurrency custodian, which means that the bank will help protect investors money from being stolen or lost. This is a big deal because it means that cryptocurrencies are here to stay! Ripple is a network of computers that helps banks transfer money quickly and easily. XRP is one of the most popular cryptocurrencies on the market (cryptocurrency market) and a lot of people use it to buy things online.
JP Morgan $206 million and eight Investments: JP Morgan has been working on developing digital assets like blockchain. One division, Onyx, is focusing on building a blockchain-based interbank payments network. The company is also developing a bank token called the JPM Coin. At first, some people were skeptical of digital currencies, but JP Morgan and the group gradually started to embrace them as a way to benefit their clients.
Barclays $12 Million and twenty-two Investments: Barclays is a bank that has studied cryptocurrencies and believes they can have a lot of potential. They think that Bitcoin is especially promising because it has a lot of volatility and spreads out information.
UBS $266 Million and five Investments: UBS is working on creating private stablecoins, which will help people make cross-border transactions. Two of UBS' financial institutions, Santander and Lloyds Banking, have created their own utility tokens (like non-fungible tokens) that can be used for this purpose. Crypto traders and investors are interested in secure places to invest when buying and selling cryptocurrencies. UBS provides a way to do this by providing legal and verified stablecoins.
Read More: Why Blockchain is Today's Most Growing Technology
BNYMLON $321 million and five investments: Fireblock is a platform for financial institutions that offers storage, issuance, and transfer of cryptocurrencies. In addition to this, Fireblock offers crypto custody services, which allows companies to look after their clients' digital assets.
Morgan Stanley $234 Million with three Investments: Morgan Stanley was the first US bank to allow its wealth management clients access to Bitcoin assets (crypto assets). In March 2021, the bank announced that it would be opening three funds that would enable Bitcoin owners to gain exposure to the cryptocurrency (digital coin). These funds will only be available to wealthier clients, who are likely to be more comfortable with the volatility of this asset.
MUFG $185 million and six investments: Japanese financial group Mitsubishi UFJ Financial Group has invested in US cryptocurrency exchange Coinbase (crypto coin) as well as Tokyo-based Bitflyer. These investments are seen as a sign of growing interest in cryptocurrencies from Japan's financial sector.
ING $170 million and six investments: Dutch multinational company has backed a blockchain liquidity management platform, HQLAx. The platform will allow companies to manage and trade cryptocurrencies more easily and efficiently.
BBVA $167 Million and five investments: Covault is a Spanish lender that uses cutting-edge technology to store, share, and verify identities. This technology is used by businesses and individuals all around the world to improve their lives.
Nomura $146 Million and five investments: Quantstamp is a blockchain-based security company that has been partnered with several Japanese banks. These banks believe in the security and potential of Quants tamp's technology and are backing the company.
Goldman Sachs $204 million and eight investments: At first, Goldman Sachs disputed the idea that cryptocurrencies were an asset class but changed its mind after engaging with experts in the field. The new report was based on extensive discussions with experts in crypto and finance.
Citibank's $279 Million and fourteen Investments: Citibank, fourth in size in the United States, has invested in SETL, a company that uses a ledger technology to move cash and assets. Citibank provides guidance to companies wanting to adopt cryptocurrency payments or simply store value in these assets. It states that enterprises need to carefully consider which digital currency they wish to use for transactions and payments.
BNP Paribas $236 Million and nine Investments: BNP Paribas is the owner of the Curv crypto startup, and it is currently testing the transfer of security tokens and taking a step towards providing custodial services to digital assets. The securities service of BNP Paribas is currently working on providing these services to its customers.
Banks That Are Most Likely To Invest
Custody Tech Providers and Solutions
Custody solutions providers and technology providers continue to be popular among top banks, raising significant funding rounds since August 2021. These deals include NYDIG ($1B), Fireblocks (550M), Gemini (400M), Anchorage Digital (335M), and Gemini (220M).
It was not surprising that the market cap of cryptocurrency reached an all-time high of $19 billion in November 2021. This resulted in increased demand for digital assets (digital tokens) and more custodians. The assets under custody ( AuC) have increased by an incredible 600% since the start of 2019. They are aware of how do cryptocurrencies work and their potential applications. In reality, banks raised significant rounds for technology providers in custody and technology ($100M and up).
- In the $1 billion growth equity round for NYDIG, Morgan Stanley made further investments.
- BNY Mellon: $550 million Series E of Fireblock will receive a follow-up investment.
- Australia's Commonwealth Bank took part in Gemini's $400 million Series B financing.
- Anchorage Digital's $350 million Series B investment from GS Growth
Blockchain Infrastructure
Morgan Stanley has invested in Figment, a blockchain infrastructure company and services company focused on increasing the adoption of Proof of Stake blockchains. This highlights the importance of middleware and protocol staking in the Web3 ecosystem, as Figment is focusing on the ecosystem and increasing the adoption of Proof of Stake blockchains.
Talos, a new digital asset and provider of crypto trading infrastructure, has drawn interest from Citi Ventures, Wells Fargo Strategic Capital, and BNY Mellon. Because Talos intends to expand support from centralized cryptocurrency trading to decentralized financial (Defi) systems, it is a preferred option among banks.
Blockdaemon is a blockchain infrastructure company that focuses on maintaining and staking nodes. They have raised multiple rounds of funding from Citi Ventures and participated in Series C and J.P. Morgan Chase. Goldman Sachs invested in their Series A round. The company's investment in blockchain technology and its representatives in the crypto community indicate its dedication to supporting the growth of the blockchain community.
Read More: 5 Ways That Blockchain Technology Is Changing the Business World
Top Banks Are Also Interested in Other Sectors
Banks are making investments in a variety of fields, such as decentralized applications, market intelligence services, and blockchain development platforms and marketplaces. These investments aim to quickly expand consumer reach, user adoption, technological innovation, and customer experience in the near future.
Trading Platforms, Asset Management, and Tokenization
Banks can invest in regional exchanges and marketplaces to help increase their exposure to new and innovative technologies. KB Investment and Hana Ventures made investments in South Korea into blockchain-enabled markets for spot asset investing, such as Buysell Standards (also known as PIECE), which allows multiple investors to buy assets from each other. KB Investment also invested multiple times in Streami, which is the company behind the GOPAX crypto-exchange. Credit Agricole Italy invested in BlockInvest, a start-up that tokenizes the process of issuing bonds and real estate. This investment will help BlockInvest grow and improve their services for the future.
Crypto Data Suppliers
Banks are investing in information providers that have expertise in navigating the risks and opportunities related to blockchain and cryptocurrency. Coin Metrics, with backing from Goldman Sachs, BNY Mellon, and Citigroup, offers market insight, network data, indexes, and solutions to assess risk. Amberdata, with Citigroup as a participating shareholder, offers data and insights on blockchain networks, decentralized finance(Defi), and all cryptocurrencies(crypto).
Security
Banks are interested in blockchain security, as the crypto industry is still vulnerable to hacks and fraud. Goldman Sachs participated in CertiK's Series B3 financing round, which was $88 million above the submitted amount. CertiK is a security audit company that monitors smart contracts and protocols. They can audit and mark projects as safe for investors using their technology.
The Banks Are Doing The Proper Steps To Increase The Acceptance Of Cryptocurrency
Some banks are investing in crypto companies, while others are waiting and watching as current regulations prevent them from engaging with these businesses. Brian Moynihan, the CEO of Bank of America, recently shared this at the World Economic Forum in Davos.
Despite their efforts, the bank has not been able to launch a cryptocurrency research department to support institutional clients and develop IP around the technology. In fact, blockchain was the central patent category that accounted for 8% of all BoA patents in 2021. This increase was due to the growing popularity of blockchain technology.
Conclusion
Some banks are incorporating crypto solutions and blockchain into their traditional banking portfolios, indicating that they view crypto as a potential addition or integrated option rather than a threat. Some banks are integrating cryptocurrency exchanges and custody services into their mobile apps. Commonwealth Bank of Australia, for example, announced that they will integrate Gemini's cryptocurrency exchange and custody service into their CommApp.
The US bank has announced a partnership with NYDIG, which will allow it to offer Bitcoin custody services to institutional investors with private funds in the US and Cayman Islands. This is a big step forward for the adoption of Bitcoin as a mainstream currency. Many traditional financial institutions are already integrating cryptocurrency adoption, and this trend is likely to continue. You'll definitely want to keep an eye on this trend.
