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In 26 May testimony before Congress, the CEOs of three major U.S. banks said their institutions remain at arm’s length from cryptocurrencies.
American banks face pressure from customers and consumers to open their doors to private digital currencies but worry about dealing in assets that are unregulated and regularly experience unpredictable gyrations in price.
Cryptocurrencies “could benefit from greater investor protection,” Gary Gensler, chair of the U.S. Securities and Exchange Commission that would oversee such regulation, has said.
The remarks by Bank of America CEO Brian Moynihan, Jane Fraser of Citigroup, and Wells Fargo’s Charles Scharf were part of hearings designed to help regulators sort out possible controls and consumer protections that might be laid on cryptocurrencies.
“Currently, we do not lend against cryptocurrencies and do not bank companies whose business is cryptocurrency or the facilitation of cryptocurrency trading and investment,” Moynihan said, but he added that the bank continues to “evaluate opportunities, risks, and client demand related to” digital money.
Although Bank of America holds 60 patents in blockchain – the technology underlying Bitcoin and many of its cousins – “we still have not found a use case at scale,” he noted.
Citigroup is taking a “measured approach… to understand changes in the digital asset space and the use of distributed ledger technology, including demand and interest by our clients, regulatory developments, and technology advancements,” Fraser testified.
“Before we engage with cryptocurrencies, we see it as our responsibility to ensure we have clear governance and controls in place,” she said.
Wells Fargo will “closely and actively follow developments around cryptocurrencies, though their status as a currency and mechanism of payment remains fluid,” Scharf said.
He added that sometime soon Wells Fargo will announce a test of blockchain technology “to complete internal book transfers of cross-border payments within our global branch network.”
James Dimon of JPMorgan Chase, David Solomon of Goldman Sachs, and James Gorman of Morgan Stanley also were slated to testify.