Barclays Considers Launching a Crypto Trading Desk
Barclays Plc, a London-based investment bank and financial services company, is considering launching a cryptocurrency trading desk, similarly to other major investment banks such as Goldman Sachs. They have made a statement that they currently have no plans to launch one, but they are weighing client interest. Barclays spokesman Andrew Smith clarified this in an email:
“Barclays has no plans at this time to build a cryptocurrency trading desk. We constantly monitor developments in the digital currency space and will continue to have a dialogue with our clients on their needs and intentions in this market going forward.”
At this point the bank has only conducted basic assessments of client demand and feasibility. According to people familiar with the manner, launch of a crypto dedicated trading desk would require approval from Tim Throsby, the President and CEO of the Corporate and Investment Bank at Barclays. Barclay’s investment bank is currently positioned as the primary mechanism the company intends to use to execute its strategy to improve its weak earnings. Back in September, Throsby promised to restore the investment bank’s ‘commercial zeal’ by engaging in more high-risk trading activities and less corporate lending.
It comes as no surprise that Barclays is exploring cryptocurrencies when their strategy is to pursue higher-risk trading activities to boost earnings. The demand is definitely there, with over 226 cryptocurrency hedge funds in existence globally, as per fintech research firm Autonomous NEXT. These hedge funds are looking for established banks to serve as custodians for their cryptocurrency assets. Regulations preventing certain entities from trading or holding cryptocurencies are the main barriers to entry for hedge funds, and the establishment of a crypto trading desk at a major investment bank like Barclays would largely eliminate these barriers.
Once definitive cryptocurrency regulations are established, the number of crypto hedge funds will probably grow at an even faster rate. If Barclays can secure a position as one of the major cryptocurrency trading desks early on, they may be able to revive their lagging earnings and become competitive again.
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