Cryptocurrency: What’s a Community Bank to do?￼
- Doug Mims
The meteoric rise of cryptocurrency has thrust the collection of tradable digital assets to the top of the business news feed, resulting in a frequent reference in mainstream media. Terms like bitcoin, crypto, blockchain, and NFTs (non-fungible tokens) have become commonplace in bank speak. With so much attention focused on it, cryptocurrency and digital assets have become a common topic at banking industry trade shows and related continuing education courses.
Never before has there been information like this that piqued community bankers’ interest more than customer polling data from the likes of Cornerstone Advisors and NYDIG. As an example, 2021 polling by NYDIG revealed the following:
Similarly, a recent Cornerstone Advisors poll found that 15% of American adults owned some form of cryptocurrency, with 60% of participants saying they would use their current bank if it offered the opportunity to invest in the digital asset. Another 32% of respondents admit that they might consider cryptocurrency at some point in the future. The same polling data indicates that 68% of all crypto owners are very interested in Bitcoin-based debit or credit card rewards.
Despite the positive customer polling data, community bank executives have been reluctant, both in practice and polling data, to commit to offering crypto-related services. Such apprehension may be prudent with the recent bad press regarding cybersecurity issues and significant devaluation. It is fair to say that the bank regulatory environment regarding crypto is still evolving.
So, what should community bankers be doing in the evolving crypto environment?
Financial institutions have historically evaluated the reward associated with new ventures and effectively managed risk on a routine basis. While cryptocurrency represents a new frontier, community banks will ultimately provide such services to meet the needs of their customers.
Whether your crypto questions are regulatory, IT, internal control, or financial reporting related, CRI’s financial institution professionals can provide you with more information and personalized assistance.
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