During a panel of incumbent financial institutions at Digital Assets Week, the moderator asked whether they see the biggest cryptocurrency exchange Binance as a threat. Hervé Francois, Digital Assets lead at ING, responded, “It reminds me of when we asked a similar question to the CEO of Blockbuster regarding Netflix. At that time, he said they’re not on our radar. And we know the rest.”
He followed up by saying that the bank is keeping an eye on all newcomers. When cooperating with fintechs each party brings different things to the table. The bank has a customer base, regulatory experience, and knowledge of certain kinds of financial assets whereas the fintechs innovate faster.
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Olivier Dang from Nomura was even more emphatic about the newcomer threat. He noted that the startups are learning from scaling volumes with cryptocurrencies which positions them well for incumbent sweet spots like security tokens. Plus, it’s not the role of regulators to protect financial institutions. So if startups are more efficient, they should be allowed to operate.
“Institutional clients may want to migrate from traditional finance to some of those new players,” said Dang. “Some of those new players now have the firepower to buy the incumbents in case they need licenses. I think it’s a threat.”
On that note, one of the big exchanges, FTX, has raised $1.4 billion in the last four months and is currently valued at $25 billion after operating for less than three years. It recently used some of its cash to buy a U.S. startup that holds a CFTC digital assets futures license.
Nomura’s Dang believes the response should be to partner with the fintechs, create joint ventures – as Nomura has with digital asset custody startup Komainu – or create its own ventures. As an example of the latter, Nomura initiated BOOSTRY in Japan, focusing on tokenizing…
