Banks still show interest in digital assets and DeFi amid market chaos

Traditional financial institutions continue to demonstrate use cases for supporting digital assets, as well as DeFi capabilities, despite the current market conditions.

The cryptocurrency industry is the Wild West compared to traditional finance, but a number of banks are looking into digital assets and decentralized finance (DeFi). This year in particular has been notable for banks exploring digital assets.

More recently, JPMorgan demonstrated how DeFi can be used to improve cross-border transactions. This came shortly after BNY Mellon - America's oldest bank - announced the launch of its digital asset custody platform, which allows certain institutional clients to hold and transfer Bitcoin (BTC) and Ether (ETH).

The Clearing House, a banking association and payments company in the United States, said on Nov. 3 that banks "should be no less able to engage in digital asset-related activities than non-banks." banks".

As banks continue to show interest in digital assets, BNY Mellon's 2022 Survey of Global Institutional Clients highlights growing demand from institutions looking to access digital assets through reputable depositories. According to the survey, almost all of the 271 institutional investors (91%) are interested in investing in tokenized assets. The survey also revealed that most of these investors use more than one custodian, with 35% dealing with traditional incumbents.

Increased demand from institutions seeking access to digital assets is one of the reasons banks are interested in cryptocurrency and DeFi offerings.

Bobby Zagotta, CEO of Bitstamp USA — a crypto...