Barclays, U. K’s second largest bank in terms of assets, has been reviewing the possibilities of opening a crypto trading desk. It is potentially joining Goldman Sachs Group Inc. to pioneer a new business on Wall Street, as reported by people associated with the matter.
According to Bloomberg’s report, Barclays has only done a preliminary assessment of feasibility and demand. The Bank stated earlier this week that they do not yet have any concrete plans to start such an operation.
According to an e-mailed statement from Andrew Smith, a spokesman:
“We constantly monitor developments in the digital currency space and will continue to have a dialogue with our clients on their needs and intentions in this market.”
These kinds of services are in a lot of demand. Hedge funds dealing with Bitcoin and other digital currencies have been keen on finding bank partners to handle transactions. A few money managers have struggled to extend themselves into cryptocurrencies because of rules and regulations that restrict them from the usage of unregulated exchanges to trade and hold investments.
The proposal of a trading desk would require permissions from investment bank boss, Tim Throsby, and Jes Staley, the Chief Executive Officer, because of the novelty of the asset class, risk and compliance requirements. No other European investment bank is building such a desk, as observed.
Staley had made this development the centerpiece of his strategy to revive earnings. For now, a few large firms from Wall Street has let customers bet on Bitcoin [BTC] through futures contracts given out by the CME Group Inc. and CBOE Global Markets INC., according to news from Bloomberg. These investments can be costly, undercutting returns and additionally, some banks have demanded the clients to set aside collateral equivalent to 100% of their trade values.
The number of hedge funds focussing on digital currency touched 226 in mid-February, according to researchers. Currently, 245 such funds are in operation from Autonomous research data.
Thorsby said in September last year that Barclays would revive commercial Zeal by authorizing dollars’ worth billions in higher-risk trading. According to Bloomberg, Bitcoin with its wild price swings could be something that the firms are looking for investment.
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