The banking industry is scrambling to catch up with the rest of the world in terms of technological advancement. Banks want to compete in and benefit from this new environment as soon as possible, and they want to do so as soon as possible. Financial advisors who work with high-net-worth individuals are now able to offer bitcoin investments to their clients. The traditional banking system is being challenged by the emergence of a new financial universe that is competing with it. In a first for the industry, cryptocurrency start-ups are offering credit cards and loans for the first time.
Despite the fact that digital currencies are gaining popularity, top executives at the largest banks in the United States have shown little enthusiasm for them. Earlier this year, JPMorgan launched an all-digital system that is modeled after the old "overnight repo" market. Goldman Sachs has recently begun displaying digital asset prices on its Marquee platform, which was previously unavailable. JPMorgan could gain control of one of the world's most important short-term funding markets if other financial institutions decide to join. Several regulatory agencies have expressed concern about JPMorgan's experimentation with the cryptocurrency bitcoin. Because the coins were tied to the dollar, regulators are concerned that the movement of the coins throughout the financial system could result in a buildup of risk, which could lead to an outpouring of fear and a bank run, according to the Financial Services Authority.
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