Bitcoin and other currencies are a threat to traditional banking. That in itself is nothing new whatsoever, However, no financial institution has ever admitted this threat is indeed very real. It is all the more surprising to see Bank of America acknowledge this threat is real. How this will play out moving forward, remains to be seen.
Bank of America is still one of the world’s biggest financial institutions. This company plays a big role in the financial sector. As such many people assume they are virtually invulnerable as a market leader. That is anything but the case, according to their latest annual report. In fact, the bank acknowledges cryptocurrencies threaten their business model as a whole. The economic and geopolitical risks have become very tangible, all of a sudden.
Bank of America Feels the Heat
This news comes at an interesting time for Bank of America. The institution began preventing clients from buying cryptocurrencies with credit and debit cards. It is evident this is a clear measure to hinder the growth of this new form of money. Some people will even see it as a last-ditch resort. Playing this trump card now will end up hurting the bank more than anything else. It is possible Bank of America will even lose customers because of this unwarranted decision.
The widespread adoption might force the bank to make some big changes. Although they did not go into detail, the term “substantial expenditures” was dropped a few times. This seems to hint at perhaps cracking down further on cryptocurrency purchases moving forward. At the same time, Bank of America wants to remain competitive whenever possible. Modifying their existing products and services is the only way forward as of right now.
For the time being, we have to wait and see what the future holds. Bank of America is the first major bank to acknowledge it feels threatened. Most banks already know this new form of money is not going away. Their best efforts to prevent customers from spending funds as they see fit is not the answer whatsoever. These institutions will need to get with the program or find themselves rendered obsolete in the near future. It will be interesting to see which side Bank of America will be on moving forward.
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