Dutch multinational banking major, Rabobank, unveiled the launch of its cryptocurrency wallet Rabobit. By integrating its online banking services with the cryptocurrency wallet, the bank will allow its customers to store their cryptocurrencies in Rabobit within the bank’s secure online banking environment. The integration of the Rabobit with the apps of Rabobank will allow the customers to store, access, send and receive both fiat and cryptocurrencies through a single bank account.
This new phenomenon of banks entering the cryptocurrency space marks a significant step in the banking sector. The market for cryptocurrency is gaining popularity among the investors, with significant growth recorded in various cryptocurrencies in the year 2017. Bitcoin’s market capitalization increased from US$15 billion to US$221 billion in 2017, recording a 14-fold growth. The other cryptocurrencies such as Ripple and Stellar also recorded very high growth in market capitalization in 2017. Cryptocurrencies are, thus, being considered the future of payments which demand the banks to reinvent their businesses to sustain and flourish in accordance to the changing trends.
The time is ripe for the banks to enter the cryptocurrency space as the investors are skeptical about the newly established players in the market. The investor’s need to have a reliable alternative for holding their assets creates a window of opportunity for banks to step into the space and take advantage of the investor’s trust for safety and security of the assets. The rapidly evolving cryptocurrency market will slowly result in these new market players to earn reputation and trust of the investors. The current scenario offers the banks a time frame to understand the cryptocurrency market operations and discover new business models to maintain their relevance in the future financial industry. The banking sector will also have a positive impact on the cryptocurrency market as the banks operate in a regulated environment. The entry of banks will require the governments to focus and develop guidelines, regulations and policies for the proper functioning of the cryptocurrency market.
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