Banks are known to be sceptical of the Bitcoin and while the crypto currency has gradually entered a number of online industries such as online Bitcoin casinos, it has yet to be accepted in the majority of countries as a true currency. However, due to the crypto currency’s anonymity, banks are looking at the associated risks as opposed to what the potential benefits for the Bitcoin currency could be. However, new technologies and tools are set to be introduced into the Bitcoin world in order to help provide banks with a support network to help them to adopt the Bitcoin.
Elliptic’s New Software
Elliptic are a Bitcoin intelligence provider and they are set to begin a program with the Silvergate Bank based in California, after raising $5m to fund the program. This program’s aim is to analyse and screen nefarious activity on the Bitcoin blockchain in order to help banks to ensure that all of the currency transactions are legitimate, and to improve visibility. In most countries, including the US, because Bitcoin is decentralised as a currency it is somewhat unregulated. This means that it doesn’t have to comply to Know-Your-Customer (KYC), anti-money laundering (AML) and Bank Secrecy Act (BSA) regulations and requirements. It is this that is making banks sceptical of the crypto currency. However, Elliptic’s new tool is set to provide a way for financial institutions to vet the currency, and find suspicious activity within the blockchain technology – allowing them to reduce any risks to their customers.
An Exception To The Rule
While Silvergate Bank are interested in trying out this new technology, they are an anomaly in the financial industry. They already provide a number of services to over 30 Bitcoin related companies which include investors, exchanges, miners and more. Because of this, there is a chance that tools tested by companies who are already open to the Bitcoin could be overlooked. Nevertheless, if tests with Elliptic’s new tool are successful, it could be a vital stepping stone in aiding banks when it comes to providing a regulatory environment with the crypto currency. With better access and the opportunity to screen each and every blockchain transaction, this could be a strong indicator towards an internal control environment in the Bitcoin world. After new Bitcoin regulations are set to be put in place around the world, a more secure Bitcoin environment could lead to a number of banks beginning to accept Bitcoin as a currency.
Bitcoin Leading Banks
Europe has been far more open to the idea of Bitcoin than the United States, with a number of European countries even having Bitcoin ATMs dotted around their major cities. Back in 2016, UK leading bank Barclays partnered with a US mobile payment start-up in order to develop a Bitcoin app, which is a start for Bitcoin to move further into mainstream finance. In 2017, we have also seen a blockchain start-up known as Humaniq join the Barclays open innovation programme known as Rise. This shows that there are a number of banks who are looking to Bitcoin potentially as the future of digital currency.