Bank of America: Cryptocurrencies Are a Threat to Our Business
One of the biggest banks in the US is finally admitting that cryptocurrencies are a threat to its business model.
In a new report filed with the Securities and Exchange Commission, the company for the first time reveals its internal thoughts on the impact cryptocurrencies may have moving forward.
“… the widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services as we grow and develop our internet banking and mobile banking channel strategies in addition to remote connectivity solutions. We might not be successful in developing or introducing new products and services, integrating new products or services into our existing offerings, responding or adapting to changes in consumer behavior, preferences, spending, investing and/or saving habits, achieving market acceptance of our products and services, reducing costs in response to pressures to deliver products and services at lower prices or sufficiently developing and maintaining loyal customers.”
Bank of America is one of several banks that recently decided to ban credit card transactions for cyptocurrencies, citing the risky nature of investing in the emerging technology. The company also takes a jab at the crypto marketplace in the new report, singling out cryptocurrencies as highly dangerous commodities.
“… clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies. Increased competition may negatively affect our earnings by creating pressure to lower prices or credit standards on our products and services requiring additional investment to improve the quality and delivery of our technology and/or reducing our market share, or affecting the willingness of our clients to do business with us.”
Despite the perceived risks Bank of America cites in cryptocurrencies, it’s clear the company is well aware of the impact crypto could have on its bottom line. The new report is littered with bold warnings about cryptocurrencies and how the changing financial landscape could leave them behind.
“We could suffer losses if our models and strategies fail to properly anticipate and manage risk.”
“Our inability to adapt our products and services to evolving industry standards and consumer preferences could harm our business.”
“We face significant and increasing competition in the financial services industry.”
“We could suffer losses if our models and strategies fail to properly anticipate and manage risk.”
Bank of America is the first major US bank to make a firm acknowledgement that cryptocurrencies threaten the status quo.
Rival financial organizations such as JPMorgan Chase have often dismissed the emerging technology as an irrelevant fad and a short term bubble bound to burst.