Over the past year, institutional investors have increased interest in cryptocurrencies, with banking giants such as JPMorgan and Goldman Sachs diversifying into crypto-related offerings. However, despite these instances, the US Federal Reserve has shared a survey showing that private banks did not see crypto as a priority.
Cryptocurrencies are not a priority for private banks
The US Federal Reserve released the results of a survey conducted on one of the largest banks in the country to understand the interest of these financial institutions in cryptocurrencies and their plans for crypto products and services.
The survey results showed that out of the 80 CFOs that took part in the survey, over 66% of them agreed to the use of distributed ledger technology (DLT). The survey also showed that crypto and decentralized finance (DeFi) products were not a priority in achieving long-term economic growth.
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The Federal Reserve said that the respondents were asked about the liquidity management practices of their banks in the short-term and the long term. They reported that their banks did not see crypto and blockchain technologies significantly affecting their liquidity management.
On the other hand, a quarter of the respondents said that blockchain and other DLT technologies were a medium to high priority in improving their infrastructure. Moreover, some respondents said that they assessed the cryptocurrency and blockchain sphere and would integrate it into their system when necessary.
Federal Reserve supports CBDC launch
Central banks worldwide have been busy researching and developing central bank digital currencies (CBDCs). The US Federal Reserve has been reluctant to launch the product with haste, saying it did not want to make any mistake during the launch.
Last month, the chair of the US Federal Reserve, Jerome Powell, said that the institution was set to launch a CBDC following the massive growth of stablecoins and other crypto assets. The institution is assessing whether a CBDC will improve the safety and efficiency of domestic payment systems.
Powell noted that a CBDC could preserve the role of the US dollar in the global markets. Regulators in the US are also assessing the benefits of web 3.0 & crypto technologies to ensure the USD does not lose its position as the world’s reserve currency. The US is already lagging behind countries such as China which are almost launching their CBDC nationally.
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