(ANTIMEDIA) — The world’s major banking institutions, however begrudgingly, may be starting to change their tune on the legitimacy of cryptocurrencies. Though not surprising, this shift is rooted in the most selfish of reasons — survival.
Last week, in an annual report filed with the U.S. Securities and Exchange Commission, Bank of America acknowledged that the growing acceptance of digital assets like bitcoin poses a major threat to its business model.
“Technological advances and the growth of e-commerce have made it easier for non-depository institutions to offer products and services that traditionally were banking products,” the report authors write, noting that this increased competition could “reduce our net interest margin and revenues.”
Indeed, Bank of America, which recently barred its customers from using credit cards to purchase cryptocurrencies, seems very much concerned that this “widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems” could have it falling out of favor with customers if it doesn’t adapt to the changing landscape:
“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.”
A failure to do adapt, the report states, could “negatively affect our earnings” and adversely affect “the willingness of our clients to do business with us.” Staying relevant, however, would require “substantial expenditures” to Bank of America’s existing business model.
On the issue of adapting, the authors acknowledge that Bank of America already faces “competitors with more experience and more established relationships with clients, regulators and industry participants in the relevant market, which could adversely affect our ability to compete.”
Astonishingly, the report even admits that the bank may already be too late to the game:
“We might not be successful in developing or introducing new products and services, integrating new products or services into our existing offerings, responding or adapting to changes in consumer behavior, preferences, spending, investing and/or saving habits, achieving market acceptance of our products and services, reducing costs in response to pressures to deliver products and services at lower prices or sufficiently developing and maintaining loyal customers.”
While this is just one report from one bank — a bank that happens to be the second largest in the U.S. in terms of assets — it’s difficult to imagine that other major financial institutions aren’t experiencing similar concerns about the ever-expanding cryptocurrency movement.
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