Mobey Forum: Time for banks to take a closer look at virtual currencies

Financial services industry association Mobey Forum has published a report entitled ‘What Banks Need to Know About Virtual Currencies Right Now’.

The association’s Virtual Currencies Expert Group, co-chaired by Hans Henrik Hoffmeyer, Co-founder of Coinify, and Peter Stephens, CIO at DrumG Technologies, was formed in 2017 to explore the strengths, weaknesses, opportunities and threats posed by virtual currencies.

Stephens comments: “Even though virtual currencies have been on the list of banks for years, most have taken a hands-off approach. This is now changing. The impact of regulations on virtual currencies is better understood and some of the world’s largest financial institutions are beginning to formalise positions. Digital assets and tokenized fundraising has gained some traction in the blockchain space and the emergence of stablecoins has the potential to bridge between traditional and crypto assets. As the industry continues to develop, it’s time for banks to take a closer look.”

“Regulations are emerging that may favour banks’ deep regulatory experience and hence are effectively preparing the ecosystem for banks to engage. The potential revenue returns are great and the range of viable options for banks are also diversifying,” Hoffmeyer adds.

“That said, the risks remain significant and manifold. Volatility is a defining characteristic of the market and reported cases of fraud are, by comparison, extraordinarily high. The combination of these factors means that now is the time for banks everywhere to move their strategic evaluation of this market higher up the priority list.”