Banking giants around the world are increasingly showing interest in emerging crypto and blockchain firms through participating in early and late-stage funding rounds for emerging firms in the sector. New research by blockchain market intelligence company Blockdata revealed that 55 out of the top 100 global banks ranked by their assets under management have some sort of investment in blockchain technology.
The report did point out that these banks’ total investments cannot be determined as they included both direct and indirect investments they participated in through various means.
Blockdata’s research placed Barclays, Citigroup, Goldman Sachs, J.P. Morgan Chase, and BNP Paribas as the most active banking investors in terms of the number of investments. However, if the valuations of the funding are considered, Standard Chartered, BNY Mellon, and Citigroup were active in the biggest funding rounds.
A recent report by account firm KPMG had also pointed towards similar trends emerging within the blockchain industry where institutional investors are showing a growing interest in emerging blockchain projects and startups.
Blockdata research further found that these banks couldn’t ignore the vast revenue streams generated by crypto custodial products. Hence, 23 out of the top 100 banks are either building custodial services themselves or investing in firms that are. These included BY Mellon, JP Morgan, Woori among other major banks around the world, especially in North Korea, the U.S.A, and Europe, that are building crypto custody platforms for their clients.
Possible reasons cited by the study for the importance granted to crypto custody services and blockchain technology by banks included regulatory changes, increasing demand by consumers to provide Bitcoin services, and visible profits garnered by crypto startups like Binance.
These trends point towards traditional banks shrugging off their hesitancy towards this novel technology as they take note of its immense revenue potential and consumer demand.