Chief executives of several leading U.S. banks have said they will be cautious about dealing with cryptocurrencies in evidence released ahead of their scheduled appearance Wednesday before a Senate committee.
Statements by Brian Moynihan of Bank of America, Jane Fraser of Citigroup and Charles Scharf of Wells Fargo as U.S. financial regulators scramble to respond to explosive growth – and confusing injury – in a crypto market that currently does not have a superior national supervisor.
Financial groups simultaneously face pressure from consumers and companies who want a share of the action – and from regulators who are apparently confused about a business environment that “could benefit from more investor protection ”, in the words of Gary Gensler, chairman of the Securities and Exchange Commission.
Moynihan pointed out the difficulties for financial executives in his testimony, saying BofA remains at a distance from the bitcoin business and its siblings even as it continues “to assess opportunities, risks and client demand for cryptocurrency -related products and services ”.
“Today, we do not lend against cryptocurrencies and not the banking companies whose primary business is cryptocurrency or the facilitation of cryptocurrency trading and investment,” he said.
Moynihan added that while his bank holds more than 60 patents related to the blockchain – the ledger technology that underpins cryptocurrency – “we have yet to find a single use case”.
Fraser said Citigroup is taking a “measurable approach” as it seeks to “understand changes in the digital asset space and the use of distributed ledger technology, including the needs and interests of our clients, regulatory advances and technological advances ”.
“Before we deal with cryptocurrencies,” he says, “we see it as our responsibility to make sure we have clear management and control in place.
Scharf said Wells will soon announce a pilot project that will use blockchain technology “to complete the transfer of the cross-border payments book within our global branch network”.
But that’s as far as he goes. He said: “We continue to closely and actively follow developments around cryptocurrency, which are evolving as alternative investment products, even as their status as a currency and payment mechanism remains fluid.”
The three bankers will be included before the Senate banking committee of fellow chief executives Jamie Dimon of JPMorgan Chase, David Solomon of Goldman Sachs and James Gorman of Morgan Stanley.
Led by Sherrod Brown, a progressive Democrat from Ohio, the committee summoned bankers for its annual hearing on Wall Street firms.
The panel was particularly interested in the response of major banks to the pandemic and in their efforts to promote diversity within their ranks and social and economic justice more broadly.