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Crypto might have captured the imaginations of retail investors, venture capitalists, and start-up founders, but for now, the largest financial institutions are giving it a pass.
A report released Friday by the Basel Committee on Banking Supervision found that the largest banks’ crypto exposure was worth only about 9.4 billion euros ($9.2 billion) or about 0.01% of the total exposures that banks must account for when determining capital requirements. Just two banks, which the report didn’t identify, made up 40% of the total.
The sharp rise of token prices over the past decade has created an acute need among investors and companies for crypto-related services like digital-asset custody, market making, and lending. In other asset classes, big banks are among the dominant players for those services, but in crypto, they have almost entirely ceded the market to crypto-focused start-ups.