It seems the American banks are not going to embrace cryptocurrency anytime soon.
In their annual filing submitted to the Securities and Exchange Commission, Bank of America shared some pessimistic outlook towards cryptocurrency. The report mentions cryptocurrency in the following contexts:
1. It can hamper the anti-money-laundering efforts of the bank
2. It can force the bank to increase their expenditure in order to stay updated on the technology
3. It will present a "competitive threat" to the bank
The interesting part is that all three mentions are made under the Risk Factors section of the report.
The first concern mentioned in the report was how cryptocurrency might make stopping money laundering more difficult. As per bank officials, their ability to comply with the anti-money-laundering laws depend upon their ability to accurately track the funds. With cryptocurrency, the tracking becomes murkier and transparency is reduced.
However, the most important insight was the fact the second-largest bank of USA admitted that cryptocurrency is indeed a competitive threat. Even though it was mentioned under the “risk factors” section, the fact that Bank of America recognizes cryptocurrency as a serious threat to their market and customer share speaks of the rising clout of crypto.
The bank said that with the rise of cryptocurrency, more people might prefer dealing with coins. Since the bank doesn't support any mechanism for the cryptocurrency, it might affect their business. Adapting to cryptocurrency would lead to significant expenditure and they would have to start from the bottom. It would involve introducing infrastructure for the cryptocurrency, staff that specializes in dealing with coins and making cryptocurrency a part of mainstream services they offer. However, it is not clear that what is Bank of America's future outlook on the issue: Are they going to bear the initial investment in order to beat the competition or continue to dig their heads under the sand and pretend that cryptocurrency is not the technology of the future?
It is worth noting that Bank of America was one of the US banks that banned the purchase of cryptocurrency using credit cards a few weeks back.