Banks cautious about crypto ahead of COVID-19 testimony before US Senate

The US Senate is set to hear the testimony of the heads of the Department of Justice, the Federal Reserve, the Securities and Exchange Commission, and other key financial players on the question of whether cryptocurrency is a security or a currency. The hearing is scheduled for May 7, 2019, and will be held by the Committee on Banking, Housing, and Urban Affairs.

Cryptocurrency is now widely accepted as a form of payment for consumer goods and services, with Bitcoin leading the way as the most popular cryptocurrency in the world today. However, this does not mean that banks are ready to accept cryptocurrency as a form of payment, with many banks skeptical about cryptocurrency. (Cryptocurrency is a form of digital currency that uses cryptography for security and can be sent over the Internet.) An example of a blog post with all of its parts organized into one cohesive paragraph, with all of the blog’s parts included, would be the following:

The heads of Wall Street’s biggest banks will appear before the US Senate Banking Committee on Wednesday to discuss the role of their financial institutions in the US economic recovery. Democratic lawmakers plan to question some big bank executives whose companies posted record profits during the COVID-19 pandemic while ordinary Americans struggled to make ends meet. In a prepared statement released Tuesday, executives from Bank of America, Citigroup and Wells Fargo explained how their banks are responding to big issues like inequality, diversity, climate change and taxes, and how their banks are handling cryptocurrencies. This year, cryptocurrency markets have seen a record boom as major financial institutions have opened up to digital assets and added trading divisions and custody units to manage clients’ holdings in large cryptocurrencies such as bitcoin (BTC). Bank of America CEO Brian Moynihan said in the statement that the bank continues to evaluate the benefits, risks and customer demand for cryptocurrency products and services. At this time, we do not lend against cryptocurrencies or provide banking services to companies primarily engaged in cryptocurrencies or facilitating cryptocurrency exchanges and investments, he said. Moynihan said BofA is also evaluating new technologies, such as distributed ledger technology, that could potentially benefit the bank’s customers. But although BofA has more than 60 blockchain patents, the bank has yet to find a large-scale application, Moynihan said. Similarly, Jane Fraser, CEO of Citigroup, has presented a moderate approach to cryptocurrencies, stating that the bank should ensure clear controls and governance before dealing with cryptocurrencies. Citi is making efforts to understand changes in digital assets and the use of distributed ledger technology, including client demand and interest, regulatory changes and technological developments, Fraser writes. Charles Scharf, CEO and chairman of Wells Fargo, said the company is closely following developments around cryptocurrencies. Digital assets have evolved into alternative investment products, although their status as money and payment is still evolving, Scharf said. The CEO also mentioned that Wells Fargo is preparing to launch a pilot of blockchain-based settlement services across the bank’s global branch network. The Senate Banking Committee and the House Financial Services Committee will also hear from executives at JPMorgan, Goldman Sachs and Morgan Stanley. The latter two companies launched limited crypto services earlier this year, while the former is reportedly considering opening a trading division for cryptocurrencies.

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