The CEOs of several major U.S. banks have expressed their warning over the use of cryptocurrencies in testimony made public ahead of their scheduled appearances before a Senate committee on Wednesday.
The remarks by Brian Moynihan of Bank of America, Jane Fraser of Citigroup and Charles Scharf of Wells Fargo came as U.S. financial regulators scramble to respond to the explosive growth – and sky-high volatility – of a crypto market currently lacking a comprehensive national supervisor.
Financial groups are simultaneously facing pressure from consumers and businesses wanting to participate in the action – and from regulators who have openly worried about a business environment that “could benefit from greater investor protection,” according to Gary Gensler, Chairman of Securities and Exchange Commission.
Moynihan alluded to the struggles of financial executives in his testimony, saying BofA is keeping his distance from the business of Bitcoin and its brethren even as it continues to “assess opportunities, risks and customer demand for the products. and cryptocurrency-related services ”.
“Currently, we do not lend against cryptocurrencies and do not bank for companies whose primary business is cryptocurrency or the facilitation of cryptocurrency trade and investment,” he said. he declares.
Moynihan added that while his bank holds more than 60 patents involving blockchain – the ledger technology that underlies cryptocurrencies – “we still haven’t found a large-scale use case.”
Fraser said Citigroup is taking a “measured approach” in seeking to “understand the changes in the digital asset space and the use of distributed ledger technology, including the demand and interest of our customers, regulatory developments and technological advances ”.
“Before we engage with cryptocurrencies,” she said, “we consider it our responsibility to ensure that we have clear governance and controls in place”.
Scharf said Wells is set to announce a pilot project using blockchain technology “to perform internal cross-border payment book transfers within our global branch network.”
But that was as far as he was going. He said: “We continue to closely and actively follow developments regarding cryptocurrencies, which have become alternative investment products, although their status as a currency and payment mechanism remains fluid.”
The three bankers were to be joined before the Senate Banking Committee by fellow CEOs Jamie Dimon of JPMorgan Chase, David Solomon of Goldman Sachs and James Gorman of Morgan Stanley.
Led by Sherrod Brown, a progressive Democrat from Ohio, the committee called the bankers for its annual watchdog hearing on Wall Street companies.
The panel was particularly interested in the response of large banks to the pandemic and their efforts to promote diversity within their ranks and social and economic justice more broadly.
The CEOs of several major U.S. banks have expressed their warning over the use of cryptocurrencies in testimony made public ahead of their scheduled appearances before a Senate committee on Wednesday.
The remarks by Brian Moynihan of Bank of America, Jane Fraser of Citigroup and Charles Scharf of Wells Fargo came as U.S. financial regulators scramble to respond to the explosive growth – and sky-high volatility – of a crypto market currently lacking a comprehensive national supervisor.
Financial groups are simultaneously facing pressure from consumers and businesses wanting to participate in the action – and from regulators who have openly worried about a business environment that “could benefit from greater investor protection,” according to Gary Gensler, Chairman of Securities and Exchange Commission.
Moynihan alluded to the struggles of financial executives in his testimony, saying BofA is keeping his distance from the business of Bitcoin and its brethren even as it continues to “assess opportunities, risks and customer demand for the products. and cryptocurrency-related services ”.
“Currently, we do not lend against cryptocurrencies and do not bank for companies whose primary business is cryptocurrency or the facilitation of cryptocurrency trade and investment,” he said. he declares.
Moynihan added that while his bank holds more than 60 patents involving blockchain – the ledger technology that underlies cryptocurrencies – “we still haven’t found a large-scale use case.”
Fraser said Citigroup is taking a “measured approach” in seeking to “understand the changes in the digital asset space and the use of distributed ledger technology, including the demand and interest of our customers, regulatory developments and technological advances ”.
“Before we engage with cryptocurrencies,” she said, “we consider it our responsibility to ensure that we have clear governance and controls in place”.
Scharf said Wells is set to announce a pilot project using blockchain technology “to perform internal cross-border payment book transfers within our global branch network.”
But that was as far as he was going. He said: “We continue to closely and actively follow developments regarding cryptocurrencies, which have become alternative investment products, although their status as a currency and payment mechanism remains fluid.”
The three bankers were to be joined before the Senate Banking Committee by fellow CEOs Jamie Dimon of JPMorgan Chase, David Solomon of Goldman Sachs and James Gorman of Morgan Stanley.
Led by Sherrod Brown, a progressive Democrat from Ohio, the committee called the bankers for its annual watchdog hearing on Wall Street companies.
The panel was particularly interested in the response of large banks to the pandemic and their efforts to promote diversity within their ranks and social and economic justice more broadly.