Ripple CEO, Brad Garlinghouse told the audience at Singapore Tech Festival that 2019 will likely be the year when banks and other financial institutions will begin to provide custody for digital assets. He stated two significant factors that will push banks into the crypto industry – a desire for profit and regulatory certainty.
Even though these institutions are acting “conservative,” Brad predicts that the fact that crypto exchanges are making a lot of money globally means that at one point or the other, these banks will want to tap into the profits being made.
On the second factor, the CEO says that banks will also rely on regulatory clarity and regulatory frameworks which allow them to participate in emerging markets. Since the bank and fiat trading system is still popular with many people, banks stand a chance to make money by offering crypto custody services.
Never in a million years did I imagine I would see this one day :
* the whole point of Bitcoin is to be free from centralized banks.
* Holding Bitcoin = no fractional reserve / magic paper gold
* Centralized currencies like $XRP have same rights as fiat – ie NONE. pic.twitter.com/GvsWtogR4y
— boxmining (@boxmining) December 3, 2018
However, it is pertinent to note that custody for cryptocurrencies will go against the basic principle of the invention. Bitcoin was built to exist without fractional reserves, so it could be institution-focused assets like XRP that match the description of custody services rendered by banks. For one thing, Ripple already has a lot of banking clients and are building solutions for the cross-border payments.
ASEAN Markets Will Launch First
While banks in different world jurisdiction will choose to launch crypto custody services at different stages, Brad predicts that the ASEAN markets will lead the initiative because of some advantages that they have over others.
He acknowledged that ASEAN markets have “regulatory clarity and a lot of progressive, forward-thinking.” “They will be the first to actually allow for crypto assets custody in their accounts,” Brad predicted.
Countries that form the ASEAN Market alliance include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.