Last edited: Nov 25, 2021

Back in 2014, regulators were discussing ways to manage and control various kinds of transactions involving Bitcoin, as at the time cryptocurrency was largely a grey area untouched by the law. Executives in the traditional banking industry saw this as a threat; they figured that regulating cryptocurrencies would also legitimize these coins as viable forms of payments and could be taking away business opportunities from the banks.

As a response, banks tried to instill doubt and fear in the general public regarding crypto. Jamie Dimon, the chief executive of JPMorgan Chase, the largest bank in the U.S., called Bitcoin a “terrible” store of value that was also utilized to facilitate transactions for illegal purposes. Christine Lagarde, the President of European Central Bank, termed cryptocurrencies as “highly speculative and suspicious” as she dismissed their credibility.

Despite these efforts, cryptocurrencies continued to blossom. New York’s Department of Financial Services first began issuing licenses for Bitcoin businesses in 2015, and by now, there are more than 75 million users of Bitcoin, and over 220 million people use various forms of cryptocurrencies globally, according to a July report by Crypto.com.

Seeing crypto’s rise to prominence, the once-skeptical banks had to change their attitude towards these digital coins. They now are instead embracing the new business opportunities crypto could bring, and are looking for ways to incorporate crypto into their core businesses. Especially since banks were late to the party, as various fintech startups already offer services of loans, credit cards, and other financial services with Bitcoin or Ethereum as the base currency, they would like to capture a piece of the crypto market’s lucrative pie.

For example, in 2020, engineers at Bank of America (BoA) filed the biggest number of patent applications in the bank’s history, including hundreds that directly or indirectly involve crypto payments technologies. A BoA spokesperson, Mark Pipitone, said that “the bank sees potential in blockchain,” and is likely filing these patent applications to keep current customers within the bank’s systems, and lure in a younger audience to adopt the services BoA has to offer.

In more recent news, according to a report from Bloomberg, Citigroup will be hiring 100 new recruits for the crypto division, as they ramp up the growth of their new digital asset division. This was a logical sequence to their expansion in digital asset trading services, as they began offering ways to trade crypto to family offices and investment managers earlier in 2021.

Jane Fraser, the CEO of Citigroup, has been quite pro-crypto as well. In an interview with Yahoo Finance, she said that it is “clear that digital assets will be part of the financial services and financial markets,” adding that “real-time payments, both in the sense of they’re frictionless, they’ll become more global, they’ll become ubiquitous. Real-time payments will be here in the near term, and digital currencies may be part of that future.”

With more involvement from traditional banks, crypto will see a much larger userbase than the current recorded number of 220 million around the world. However, this will only reflect crypto’s growth long-term, as most coins are still down over the past 24 hours.

BTC price chart last 24 hours (15 minute intervals)