Barclays (LSE: BARC) has reportedly scrapped its plan to launch a cryptocurrency trading desk. However, it remain unclear whether the U.K. banking giant is acting under pressure from regulators or for other reasons, such as insufficient demand for crypto-related services from hedge funds.
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Crypto Plan ‘On Ice’
A group of senior Barclays executives have stopped working on the initiative, according to a report by Financial News London, citing two people familiar with the situation. Chris Tyrer, the man who headed the bank’s “digital assets project,” is said to have parted ways with Barclays in September, following a decision to put the initiative “on ice.”
The group of four executives, assembled earlier this year, was reportedly trying to assess the long-term viability of cryptocurrencies as an asset class. They were also looking at demand for cryptocurrencies among the bank’s clients and the kind of IT infrastructure that would be needed to support trading. It is unclear if the executives had reached any firm conclusions about the project at the time the bank decided to drop the plan.
Sources close to Barclays first revealed that the bank was considering launching a cryptocurrency trading desk back in April. It was reportedly trying to gauge potential demand among its clients, which include hedge funds and other large investors. Although the bank denied that it had any specific plans to launch a cryptocurrency trading desk at the time, sources revealed it had already conducted preliminary demand and feasibility assessments.
In May, Barclays CEO Jes Staley denied that the bank would be opening a cryptocurrency trading desk in a speech at the bank’s annual general meeting.
“Cryptocurrency is a real challenge for us because, on the one hand, there is the innovative side of it and wanting to stay in the forefront of technology’s improvement in finance,” Staley told shareholders. “On the other side of it, there is the possibility of cryptocurrencies being used for activities that the bank wants to have no part of.”
However, despite Staley’s denial, Barclays filed two cryptocurrency-related patents with the United States Patent and Trademark Office in July.
Will Barclays be too late to return to the crypto market once prices pick up? Share your thoughts in the comments section below.
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