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Dedicated Cryptocurrency Teams Exploding in Traditional Financial Companies

Despite the financial volatility that has engulfed the global economic landscape over the last month or so, nothing seems to be stopping the growth of the crypto market, especially the unusable token sector. usable (NFT). This growth is marked by the fact that the total market capitalization of cryptocurrencies has get a raise from about $800 billion to $1.8 trillion since the beginning of 2021.

Furthermore, a report from NonFungible.com was released late last month disclosure NFT market-related sales skyrocketed to an all-time high of $17.6 billion in 2021, up 21,000% from 2020.

The report also shows that individuals investing in the NFT market made huge profits of $5.4 billion collectively last year. It is therefore not surprising that a growing list of major entities has continued to find their way into the crypto space.

Mainstream Companies Explore Cryptocurrency Technology

On March 2, Nomura Holdings – one of Japan’s largest financial companies, with approximately 70 trillion yen ($593 billion) in assets under management – announced it would launching a new digital asset wing to consider the opportunities offered by the cryptocurrency market, especially the NFT, and to help their customers increase the exposure and use of digital currencies and other related services. The company – which deals in retail, wholesale and investment businesses – announced it would restructure its Future Innovation Company and begin updating its operations in April.

Several major companies have also made similar moves in recent months, including e-commerce giant Rakuten, which announced the launch of very own NFT . trading platform, named Rakuten NFT. Japan’s largest financial group, Mitsubishi UFJ Financial Group, also revealed that it will cancel its blockchain payments project in order to focus on the growing stablecoin market.

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The headquarters of the Bank of Tokyo – Mitsubishi UFJ in Chiyoda-ku, Tokyo. Source: Kakidai

Dedicated crypto wings are fast becoming the norm

Christopher Temme, chief financial officer of US crypto exchange bitFlyer, spoke to Cointelegraph about whether the trend of mainstream companies creating dedicated crypto departments continues into the future. are not.

In his view, companies like Nomura creating digital asset-focused business units should come as no surprise, as clients of most multinational corporations are driving this kind of marketing. this contact, adding:

“What’s more interesting is that Nomura is exploring NFTs specifically. Their rapid growth and acceptance in the creative/collectible space has been the perfect testing ground for consolidating the technology in preparation for digital ownership of ‘real’ and ‘real’ assets. As a result, communities will be formed around it. “

Temme also noted that while Japanese financial institutions have traditionally been quite cautious in their financial outlook, the fact that Nomura is exploring the crypto space through a dedicated division acting as a a strong indicator of what is to come in the near future.

Similarly, Takaaki Kato, global head of sales and sales at bitFlyer, told Cointelegraph that, as a general rule, mainstream companies tend to follow a herd mentality – meaning when If a major player creates a department for crypto exploration, it’s only a matter of time before others follow suit.

Temme and Kato’s comments were also echoed by Jimmy Yin, founder of iZUMi Finance – a liquidity-as-a-service platform – who told Cointelegraph that creating specialized crypto wings Usage is likely to become the norm as we move into an increasingly decentralized future. However, he notes that there are a few things that companies need to consider before taking important steps in this direction:

“We can see massive growth in terms of NFTs and crypto asset users in general over the past year. That said, many factors, including legalization, must be considered, especially when it comes to advertising to the masses. With the current geopolitical turmoil unfolding, cryptocurrencies are seen as a challenge to what is considered stable.”

In Yin’s view, the trend will gain momentum if social acceptance of cryptocurrencies continues to grow, especially as a full-blown technology allows for a multitude of benefits – not just a payment instrument. “Whether cryptocurrencies are accepted as a social norm depends not on these business giants but on the common interest of citizens,” he said.

Numbers don’t lie

In mid-2021, Bank of America established a dedicated team focus on crypto and digital asset strategy, citing increasing customer demand and other related factors for mobility. In one research published by the company by the end of that year, analysts noted that the digital asset market had become too large for any forward-looking company to ignore, with cryptocurrencies having reached market capitalization $2 trillion by 2021 – and has over 200 million users.

The researchers further note that crypto-based digital assets could form an entirely new asset class in the coming months and years. Not only that, they acknowledge that the digital asset ecosystem has expanded into areas unimaginable in the past few years – including decentralized finance, stablecoins, bank digital currencies central bank (CBDC) and NFT – meaning that more and more traditional players are forced to join the conflict early.

From a pure numbers point of view, venture capital-related blockchain and digital asset investments reached over $17 billion in Q1 and Q2 2021, less than 5.5 percent total. combined billion dollars of the previous year.

Finally, as more companies begin to realize the potential that cryptocurrencies have in a variety of industries – including finance, supply chain, gaming and social media – the advent of research teams Dedicated cryptocurrencies don’t seem to be a far-fetched concept anymore. Samiar Tehrani, co-founder of Ratio Finance — a mortgage-backed debt positions platform based on Solana — told Cointelegraph that digital assets represent tangible use cases that are poised to meet the many challenges that come with it. the world of traditional finance put forward, adding:

“Even after going through some recent major corrections, the current market capitalization of the crypto sector remains at $1.8 trillion, which is higher than the GDP of many major countries. That tells you all you need to know about how big this space has become and whether companies really take this market seriously. I believe most companies already have dedicated teams working overtime to explore this space so as not to be left behind. “

Most traditional companies see a lot of value in cryptocurrencies

Like Bank of America, many other financial miners have also recently jumped into the late stages of the crypto market. For example, late last year, Morgan Stanley Launched Cryptocurrency Research Team led by Sheena Shah, the company’s lead digital asset analyst, with Adam Wood and James Faucette, the bank’s head of fintech and payments research in Europe and the US, respectively. .

It should also be noted that Morgan Stanley was one of the first major investment banks to fully accept digital currencies, with the company launching a total of 15 crypto-related mutual funds to clients. your goods in the past 18 months.

In addition, State Street, the second oldest continuously operating bank in the United States, Launch of a dedicated digital finance division in June 2021, noted that they need to focus on future-focused technologies such as crypto, blockchain, CBDC, and cryptography to keep up with the ever-evolving global financial landscape.

So, as the world continues to move towards the use of digital assets, it makes sense that more and more companies will scrutinize the various services connected to the space. In this regard, it seems that many companies consider the creation of these groups that specialize in this area of ​​​​finance as the best means of doing so.