According to a study by the Basel Committee, the largest banks in the world have about $9 billion worth of crypto assets. The study looked at 19 of the biggest financial institutions of the world. 10 of the banks were from the Americas, seven from Europe, and two from the rest of the world.
Crypto exposure of the 19 banks that sent in their data amounts to 0.14%. The same when applied to global standards, would amount to 0.01%. However, the study does note that “as the crypto market is fast evolving, it is difficult to ascertain whether some banks have under- or over-reported their exposures.”
According to the study, a majority of the exposure lies in Bitcoin (BTC) and Ethereum (ETH), or assets based on those two currencies. Bitcoin accounted for 31%, while Ethereum accounted for 22%. Other assets based on BTC and ETH account for 25% and 10% respectively. Other reported exposures include Polkadot (2%), Ripple XRP (2%), Cardano Ada (1%), Solana (1%), Litecoin (0.4%) and Stellar (0.4%). The banks also reported some amount of stablecoins (USD Coin) and tokenized assets.
The data is dominated by the services that banks offer, such as custody, clearing, and market making. However, most of the assets are concentrated in a few institutions. Hence, the study notes that the results may not be an accurate representation of the truth.
Are institutions still a long way from crypto?
Given the data, it may appear that institutions are pouring in the bear minimum into crypto assets. However, the industry is still in its nascent stages. Bitcoin, the original cryptocurrency, debuted only a little over a decade ago. There is a long journey ahead and plenty of time for institutions to dip their toes into the asset class.
Moreover, the fact that financial giants are exposing themselves to cryptocurrencies to begin with, is a testament to the growth of the space. Therefore the future, it would appear, does look bright for the industry.
At press time, the global cryptocurrency market cap stood at $980 billion, down by 0.3% in the last 24 hours.