For all the inroads that bitcoin has made on the present-day financial system, it has yet to creep up their dominance. The CEOs of Paypal, Visa, and other legacy payment systems may have been monitoring the rise of cryptocurrencies, but they have not been losing sleep over them. Now, in a frank report to the SEC, Bank of America has recognized a range of threats that could affect its hegemony – and one of them is cryptocurrency.
“The widespread embracing of new technologies, including internet services, cryptocurrencies and payment systems, could require significant expenditures to modify or adapt our existing products and services,” writes Bank of America (BoA). Its annual report to the U.S. Securities and Exchange Commission (SEC) is a condensed and dry document that is filed for regulatory purposes. This year’s submission contains a few interesting tidbits for bitcoiners, for it makes mention of cryptocurrency three times.
BoA, which was founded in 1904 under the moniker of Bank of Italy, has over 200,000 employees and recorded revenue of $87 billion last year. Like all companies subject to the regulatory oversight of the SEC, it is obliged to provide an annual report that details its financial health and outlines potential threats to its business model. “We face momentous and increasing competition in the financial services industry,” it writes, before yielding, a few sentences later, “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.”
It is the third and final mention of cryptocurrency that is the most fascinating in Bank of America’s 90-page report. It writes: “The extensive espousal of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services…We might not be successful in developing or introducing new products and services… decreasing costs in response to pressures to deliver products and services at lower prices or adequately developing and maintaining loyal customers.”
This doesn’t mean that America’s second largest bank is in retreat of crypto. But the very fact that it is recognizing their impact – and their potential to upset the banking sector – is a modest milestone at least. The bank’s attitude to bitcoin and its kind is unclear, but as news.Bitcoin.com recently reported, Bank of America has filed more cryptocurrency patents than any other company. Of course, that statistic does not mean it is self-assured to start trialing its own blockchain technology. Nevertheless, if major banks were to reduce their charges in response to competition from other payment systems, including cryptocurrency, many bitcoiners would consider that a small but satisfying victory.