In 2021, banks will start integrating cryptocurrency into their system and create custodian wallets for storing and using digital currencies.
The boundaries between traditional finance and cryptocurrencies will blur
According to research by Xangle and Hanhwa, this year will see a convergence between the traditional finance market and the cryptocurrency sector. First of all, this will manifest itself in the integration of digital currencies into the banking system.
According to Xangle analysts, banks will start creating custodian wallets with cryptocurrency support in 2021 in order to provide users with simultaneous access to both digital assets and fiat money.
To ensure the safety of user data, as well as control the circulation of cryptocurrency in the world, banks and cryptocurrency companies will tighten requirements for users in terms of personal identification.
More and more cryptocurrency exchanges, exchangers and P2P platforms will require customers to go through the KYC (know your customer) procedure. Traditional banks will follow the same path, since it is through them that most of the money stolen in the world is laundered.
Also this year, blockchain companies will develop analytical services for tracking transactions by traditional banks in order to avoid cases of money laundering. According to research by CipherTrace, most banks operating in the world do not understand the nature of cryptocurrency transactions, and therefore cannot adequately analyze and block them.
Note that Ukraine is already following this path. Last year, the Ministry of Digital Industry and Blockchain Crystal signed a Memorandum of Cooperation, within the framework of which they will work on the creation and implementation of analytical tools that will allow you to control and block suspicious transactions.
Institutional Investors Will Invest in Bitcoin
Researchers believe that large corporate and institutional investors will be investing in bitcoin in 2021. Microstrategy, Grayscale, and Tesla have set an example that other corporations will follow. Note that not everyone shares this point of view. For example, JP Morgan does not believe in the Bitcoin craze because of its volatility.
The activity of institutional investors will lead to the fact that the US Securities Commission (SEC) will most likely meet halfway and give permission to register the first bitcoin ETFs in America. Note that in 2020, the SEC denied financial firm Wilshire Phoenix to launch a tradable exchange-traded fund (ETF) on bitcoin, citing problems with fraud and market manipulation.
At the moment, large institutional and corporate investors can only invest in cryptocurrencies through trusts that are created by companies like Grayscale. Last year, the organization launched more than a dozen trusts that allow investing in bitcoin, ether, Litecoin, Chainlink and a number of DeFi tokens.
Xangle analysts predict that institutional investment in cryptocurrencies will increase by 30% in 2021, pushing the bitcoin price up to new highs.