19 Global Banks Hold 9.4 Billion Euros in Digital Assets

Jimmy Aki
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A recent survey indicates that 19 tier-1 global banks hold 9.4 billion Euros ($9.38 billion) in cryptocurrencies. This was revealed in a first-of-its-kind study by the Basel III Monitoring Report of the Bank of International Settlement (BIS).

10 Banks Are American Owned

The Basel Committee of the BIS recently released a ground-breaking study on crypto asset holdings of major global banks. According to the body, 19 tier-1 financial institutions hold collective assets under management (AUM) of over $9.38 billion or 9.4 billion Euros.

Ten of these banks are American-owned, pointing to a strong institutional interest in digital assets in the world economic power. Seven are European-based, while the remaining two are from other parts of the world.

The AUM constitutes about 0.14% of total exposures based on a weighted average basis across the 182 global banks surveyed. Of the total surveyed banks, the amount of cryptocurrencies in their portfolio stands at 0.01% of their total risk-weighted assets.

Due to the uneven distribution of crypto reported by the banks, the Basel report states that only two banks account for over half of the cryptocurrencies reported. Four more global banks make up below 40% of the remaining exposures; the committee revealed that some banks may have under or over-reported their crypto portfolio.

Giving insight into what assets comprise most of the banks’ holdings, Bitcoin came up top, with 31% of banks holding the crypto asset. Ethereum came up second with 22%, while Polkadot and cross-border payment token XRP followed with a 2% exposure. Cardano and Solana both managed a 1% interest from the banks, while Litecoin and Stellar Lumens flanked the rear with 0.4% each.

The digital assets’ utility across the banks was grouped across crypto holding and lending, clearing, client and market-making services, custody, and insurance. Of the three, crypto wallet custody and insurance ranked the highest, with over 50.2% of banks offering them. Clearing, client and market-making services came up second with 45.7%, while crypto holdings and lending followed with 4.2%.

Legacy Businesses Gain More Exposure to Crypto

With the global economy facing a stiff battle following the impact of the Covid-19 pandemic, many countries and businesses have struggled to break even. More companies are now starting to invest in cryptocurrency to hedge against inflations and store their wealth.

Companies like US business intelligence company MicroStrategy have been at the forefront of crypto purchases. The tech firm already holds 130k Bitcoins in its portfolio. Other companies have been slow to take the plunge due to the rising cases of crypto frauds, hacks, and scams but solutions are being developed to stem this malicious tide.

One such effort is Mastercard’s newly launched Crypto Secure solution, developed by its blockchain security firm CipherTrace. Launched on October 4, Crypto Secure is a fraud-prevention software solution that runs a risk assessment on over 2,400 global crypto exchanges on the Mastercard payment network.

The risk profile of each crypto exchange is graded from red for high risk to green for low risk. Crypto Secure is Mastercard’s efforts to bring security and safety into the crypto ecosystem, which has been prone to scams and frauds. Over $1.4 billion have been stolen from blockchain networks in the last ten months. According to Chainalysis data, 97% of the stolen funds are from decentralized finance (DeFi) ecosystems.

Mastercard’s security service could incentivize even more businesses and financial institutions to take the leap into the booming crypto market.

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About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.