BoA COO Sees Value in Crypto for Banks

Bank of America chief operating officer Tom Montag said at a Chainalysis event Thursday (Nov. 4) in New York City that some parts of the blockchain and cryptocurrency could enhance banks’ value.

“I believe some of the things that are happening today will provide that technological jump that allows banks to be more efficient, (have) less errors, be more compliant,” he said about cryptocurrency. “We look forward to figuring out a way to use it best and have it be part of the system.”

BoA started a cryptocurrency research division, led by head of global cryptocurrency and digital asset strategy Alkesh Shah, last month, and released the Digital Assets Primer report, noting 221 million people purchased or sold a cryptocurrency as of June 2021, up from 66 million in May 2020.

“It’s difficult to overstate how transformative blockchain technology, digital assets and the thousands of decentralized apps that have yet to be created could potentially be,” the report says.

Montag said he believes “there’s certain things that probably need to happen” before Bank of America could offer loans against cryptocurrency assets, noting they already lend against art, houses, boats and railroad cars, but crypto doesn’t show enough stability to consider that yet.” he said.

Montag pointed to Argentina’s failure in basing their currency on the dollar, thus stifling inflation, when asked about stablecoins.

“If the Fed had a stablecoin, you’d be pretty comfortable; if someone else had a stablecoin you’d be less comfortable,” he said in a Blockworks report Friday (Nov. 5). “If it’s stable and it’s better and people feel comfortable with it, it would be good for the economy, banks, everybody. But that’s what I would be worried about — is it really a stable coin?”

Montag sees a central bank digital currency (CBDC) as “inevitable,” adding he expects it to thrive in the digital economy.

Related: Consumers Mull Switching Rewards to Cryptocurrency

PYMNTS’ recent study, “The Cryptocurrency Payments Opportunity: Driving Crypto Adoption and Use Around the Globe,” shows that investments in digital currencies among Americans have increased, as 48% of investors bought such alternative currencies in the first half of 2021.