While once looked at as volatile or unstable investments, blockchain and crypto have become increasingly legitimized within the financial world. Companies like Mastercard, Visa, and American Express have partnered with digital asset companies to allow banks and merchants in-network to offer crypto-related services. Major banks like JPMorgan Chase, Goldman Sachs, and Bank of America have crypto trading desks, while wealth management firms like Morgan Stanley provide access to crypto through products and funds and Citi’s wealth management unit created a digital asset group to help customers invest in crypto, stablecoins, NFTs, and CBDCs. Furthermore, the JPM coin digital currency is being used to support domestic and cross-border payments.
This trend towards increased interest in blockchain and crypto is unsurprising, especially when examining TEAM LEWIS’ original research into the rise of blockchain technologies and cryptocurrencies in 2021. The survey uncovered the extent to which bankers are invested in the new technology, both personally and corporately.
The data showed that banks are more invested in blockchain technology in more ways than previously known. Bankers were increasingly personally invested in cryptocurrencies despite reservations around trustworthiness. While only 45 percent of bankers believed cryptocurrencies are always trustworthy, 61 percent were personally invested currently with 75 percent indicating they were likely to invest in the future.
The study also suggested blockchain solutions were poised to modernize the sector with 82 percent of banks already invested in the technology and 88 percent believing it would have a positive impact on the financial services industry.
“Finance and banking are currently facing a series of challenges not only from the pandemic and the growing number of cyberattacks but also from uncertainty and a lack of understanding relating to cryptocurrencies,” said Matt Robbins, Vice President, Research and Insights at LEWIS. “Our research indicates blockchain has the potential to impact multiple industries but could transform financial services by helping to rebuild trust with consumers.”
The report suggested that the benefits of blockchain could help close the growing trust gap with the public and renew confidence in financial institutions. The following top three benefits of using blockchain were identified by over 80 percent of respondents:
- faster transaction times
- greater security
- increased transparency
This is aligned with recent increased interest and investment in blockchain within the traditional finance sector. Industry leaders like JPMorgan and Citi have expressed interest in using blockchain to speed up trades on Wall Street. According to one June 2023 report from Bernstein, tokenization could unlock faster settlement times and lower costs – with the firm projecting $5 trillion in assets could be tokenized on blockchains over the next five years.
Industry leaders expect tokenization to be the next frontier for markets, with BlackRock estimating that tokenization of private market assets will open markets worth $290 trillion and Boston Consulting Group predicting that some $16 trillion worth of assets will be tokenized by 2030. Tokenization also offers numerous benefits to SMBS, including better, cheaper, and faster access to liquidity, while investors will gain access to a new world of investment opportunities through tokenization.
Read the full report here.
The Research Methodology
The Banking on Blockchain report is based on a survey conducted by the LEWIS Research and Insights team to gain a deeper understanding into the future of blockchain and cryptocurrency. The survey was fielded from March 24th – March 26, 2021 and captured responses from full-time employees in the banking industry located in the United States. A total of 501 respondents were captured and the overall margin of error is 4.32% at a 95% Confidence Interval. The respondents were sourced from Logit Group.
