Cryptocurrencies have had a troubled past. With a rocky start and early users mainly purported to be making use of the system for criminal activities, Financial Institutions were wary at first and have blown hot and cold in recent years.
In March 2016, The Bank of England announced it had made inroads into researching cryptocurrencies whilst looking at producing a cryptocurrency of its own, linked to sterling. It was reported that computer scientists at University College London had devised a crypto currency known as the ‘RSCoin’ with backing from the Bank of England.
They were not alone, it was also reported at the same time that the Swiss banking giant, UBS, and ten other companies had said they planned to use the technical idea behind bitcoin, blockchain, for their own digital currency (paywall), paving the way for the world’s biggest central banks to do the same. The ‘utility settlement coin’ project started by UBS and Clearmatics Technologies in 2015 had lately been joined by Barclays and HSBC.
In January 2018, billionaire Investor, Warren Buffett, Chairman and CEO of Berkshire Hathaway, said he thought cryptocurrencies would end badly. He told CNBC’s ‘Squawk Box’, “We’ll never have a position in them, I can say with almost certainty that they will come to a bad ending.”
In February 2018, several of the biggest issuers of credit cards in the US banned customers from using their cards to buy digital currency. At the same time banks in the UK did the same. The ban was announced on customers buying bitcoin and other crypto currency on their credit cards.
In March 2018, Mark Carney, Governor of the Bank of England warned that cryptocurrencies such as Bitcoin should be regulated. Regulation would crack down on illegal activities and protect the financial system.
Cryptocurrencies are again gaining traction and attention from traditional financial institutions. Experts believe it should come as no surprise that the gatekeepers of the traditional financial markets are starting to take notice, things are drastically shifting in the fintech field for crypto assets and their usage with the public.
In a recent Forbes technology council article, Michael Taggart, President of Crytonomex, the company that authored the Graphene blockchain, originally developed as the foundation of Bitshares, said;
“With many of the new coins and tokens coming to market, some are beginning to go back to the traditional roots of the movement: currencies. Not all cryptocurrencies are behaving like speculative “bubbles” or securities. In fact, many are making the push to embrace the “currency” in “cryptocurrency.” Of this specific class of cryptocurrencies, the market has seen projects like the recently announced development of the Sovereign (SOV) token, coming to the public not as securities to be bought and sold like stocks but rather as an actual medium of exchange. Additionally, now Russian officials are considering the release of their very own state-controlled cryptocurrency to function as a medium of exchange: the cryptoruble. Cryptocurrencies that are actually functionally and legally used as currencies could be the tipping point for banks beginning to shift their attitude towards the growing technology, but haven’t some already done that?”