5 major UK banks and their investment in crypto and blockchain

Highlights

• Top banks across the globe are investing in crypto and blockchain companies, according to the new report by Blockdata.
• With investments in 19 blockchain firms, British universal bank Barclays has topped the list.
• Banks’ investments in crypto-related services are increasing due to higher profitability, client requests, and change in regulations.

More than half of the biggest banks across the globe are now investing in crypto and blockchain companies, according to a new report published by Blockdata, a blockchain research firm. As per the report, 55 of the 100 biggest banks by assets under management (AUM) are either directly investing in crypto or blockchain-related businesses, or indirectly investing through their subsidiaries. Considering the total number of investments in blockchain firms, Blockdata has also provided with the names of the banks which are most actively making such investments.

With deals with 19 blockchain firms, British universal bank Barclays is on top of the list in terms of number of investments. US investment bank Citigroup is at #2 with nine investments in blockchain firms. Following them are eight investments of global investment bank, Goldman Sachs, seven investments of financial services and investment bank JPMorgan Chase, and six investments of French international banking group BNP Paribas.

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The US $2 trillion cryptocurrency market has been pumped with US $3 billion in funding so far into cryptocurrency and blockchain companies by the largest 13 banks in the world. The list of these 13 banks provided by Blockdata includes London-based Standard Chartered at the first position, with US $380 million in valuation of the funding rounds in which it participated, with six investments.

Of the top 100 banks, approximately a quarter of them has been attracted by the investment opportunities in the crypto custody space, as per Blockdata. Even though many of these banks have criticised bitcoin, they can’t neglect the importance of investing is crypto custody, because of its potential to generate revenue streams as well as in creating a strong strategic position in the crypto economy. Out of the 100 biggest banks by assets under management (AUM), around 23 are either developing custody solutions, or are investing in the companies that provide these solutions.

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Why are banks investing in crypto-related services?

According to Blockdata, the leading banks started offering crypto-related services to clients for 3 main reasons. Firstly, banks across the globe have been witnessing cryptocurrency exchanges making substantially more profits and getting more valuable than them, with just a fraction of the total number of people employed by banks. For example, in 2018, Binance, which is the world's largest crypto exchange, recorded US $54 million more profit in comparison to the Deutsche Bank, with Binance employing just 200 people as compared to 100,000 Deutsche Bank employees.

Recently, the valuation of cryptocurrency exchange platform Coinbase was recorded as higher than Goldman Sachs, with just 4% of the total number of employees in Goldman Sachs.

Secondly, due to increasing investments in the crypto markets, the clients have been requesting banks to provide bitcoin solutions, which has created a pressure on them to do the same.

Lastly, banks have been allowed to offer crypto custody solutions because of the recent change in the concerned regulations in 2020.

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 5 major UK banks investing in crypto and blockchain companies.

Standard Chartered

With US $380 million in valuation and six major investment deals, London-based Standard Chartered is one of the major banks in the UK, which offers crypto-related services. Its investments include blockchain network Ripple, whose XRP token has a capitalisation of approximately US $48 billion, which makes it the sixth-largest cryptocurrency in terms of market value. The banks has also made investments in Cobalt, which is a UK-based trading technology provider.

Barclays

With US $12 million in valuation and total 22 investments, London-based Barclays is also one of the major banks in the UK which offers crypto-related services. The investment deals include RealBlocks, which is an interface that connects investors to alternative investment managers.

Apart from Standard Chartered and Barclays, which are a part of Blockdata’s list of the 13 banks that have invested the most in cryptocurrency and blockchain companies to date, other crypto- friendly banks in the UK include the following.

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Royal Bank of Scotland (RBS)

RBS is a major UK-based bank that is largely reported by customers as not having much issues while dealing with cryptocurrency transactions, especially with popular crypto exchanges, such as Coinbase and CEX.io. The customers are provided with credit or debit cards which can be used to buy crypto, and also seamlessly withdraw or deposit to exchanges.

Nationwide

British mutual financial institution Nationwide Building Society is the seventh largest cooperative financial institution as well as the largest building society across the globe. It is considered crypto-friendly as it allows debit card purchases, and also allows seamless withdrawals or deposits to cryptocurrency exchange platforms. But, it has banned credit card transactions.

TSB Bank

UK-based retail and commercial bank TSB Bank allows its customers to carry out credit and debit card crypto purchases. As such, no issues have been faced with withdrawals as well as deposits to cryptocurrency exchanges.

Even though many UK banks have become crypto friendly, some of the major UK banks, such as Lloyds Bank and HSBC Banks haven’t, due to the inherent volatility of cryptocurrency as well as lack of clear-cut regulations. Progressive banks are already investing in crypto-based services, and the traditional banks will hopefully become more crypto-friendly in future, with increased clarity in regulations

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