Shunning Banks or Depending on Them? Crypto Markets and the Rise of Crypto-Friendly Banking

Athanassiou Phoebus L.
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Athanassiou Phoebus L.: PhD (King’s College, London); LLM (King’s College, London); LLB (Queen Mary College, London); Senior Lead Legal Counsel, European Central Bank; Associate Professor, Goethe Universität, Frankfurt am Main.United Kingdom of Great Britain and Northern Ireland

European Company and Financial Law Review, 2021, vol. 18, issue 3, 321-337

Abstract: Often touted as the opposite of money and banks, crypto-assets and their ecosystem may gradually be coming to terms with the idea that their success will also depend on their issuers’ readiness to adhere to conventional financial practices, on their acceptance of the preponderant role that banks have to play in the financial system, and on their ability to access basic banking services. Some within the banking community are starting to reciprocate the attention, by positioning themselves so as to serve the needs of crypto assets and their ecosystem, as a promising source of revenue at a challenging time for bank profitability. No less important for the emergence of crypto-friendly banks than the risk appetite of existing or new banking service providers is the regulators’, supervisors’ and policy makers’ stance vis-à-vis crypto-friendly banking. This paper explores the relationship of dependency between crypto and banks, how some banks around the world are facing up to the challenge of serving crypto-assets and their holders, and how policy makers, regulators and supervisors in Europe and elsewhere may want to position themselves vis-à-vis the incipient phenomenon of crypto-friendly banking.

Date: 2021
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DOI: 10.1515/ecfr-2021-0015

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