In a yearly regulatory filing to the Securities and Exchange Commission (SEC), the Bank of America, the second biggest bank of America expressed that digital currencies are representing a genuine risk to it. The theories have dependably been raving with respect to digital currencies like bitcoin introducing a threat to traditional large financial institutions.
In the filing, the bank composed:
“The widespread adoption of new technologies, including internet services, cryptocurrencies, and payment systems, could require substantial expenditures to modify or adapt our existing products and services.”
It has likewise been expressed that digital currencies additionally shows the challenge to track the client funds’ movement, thus, making compliance with regulations troublesome.
Moreover, as per the bank, the expanded rivalry from digital currencies can likewise influence their earnings contrarily separated from influencing the enthusiasm of customers to work with them.
The bank expressed:
“Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.”
With the expansion in the fame of the cryptocurrencies, their prices are increasing colossal heights. Bitcoin, which was beneath $1,000 in 2016, got its record-breaking high at $20,000 a year ago and is as of now riding at $10,157. This surge of enthusiasm for digital currencies likewise prompted the launch of bitcoin futures by Cboe and CME.
There has been a considerable increment in these virtual currencies to such an extent that now nations are building up their own coins in numerous creative ways.
Nonetheless, banks like Bank of America aren’t minimum bit intrigued by these digital currencies. This is clear from its wealth administration branch Merrill Lynch prohibiting around 17,000 of its financial advisors from purchasing bitcoin and comparable investments for their customers.
In the 13,000 word section of the filing, there have been just three references to the digital currencies. Be that as it may, given the bank’s warning about digital currencies, financial institutions are unquestionably considering them.
Bank of America is likewise among those banks that are keeping its clients from utilizing debit cards to buy the digital currency while asserting that they simply want their clients to be protected.