“Banks need to lose their fear of cryptocurrencies,” says Labitconf

“The truth is that banks want to get into” the cryptocurrency business, but they want to “know the rules of the game.” So said Pamela Clegg, vice president of financial investigations at Ciphertrace, the cryptoasset analytics, threats and anti-money laundering solutions company acquired by Mastercard, on Nov. 11.

His remarks took place during the 2022 edition of Labitconf, the largest event on Bitcoin in Latin America covered by CryptoNews and held this time in Argentina. There he participated in a conference entitled. “The road to becoming a cryptocurrency-friendly bank.” along with other specialists in the field.

Pamela added that “in countries where regulation has been introduced, there are more banks entering the market.” However, she pointed out that in other places banks want clear regulation to start offering services with cryptocurrencies.

“Many of them are willing to enter more strongly, with more investment, if they understand the rules, the (regulatory) lanes,” he said. He added that this is why “quite a few” banks use Mastercard’s Ciphertrace to find out how to enter the industry safely and what the risks are to mitigate them.

Labitconf discusses case of cryptocurrency ban in Argentine banks

The conference was also attended by Federico Murrone, founder and CEO of Lirium, an Argentine company that provides cryptocurrencies to banks and lenders. wallets. And he expressed his opinion on the ban issued by the Central Bank of Argentinain May 2022 that banks will be able to offer cryptocurrency services, as reported by CryptoNoticias.

This ban came just days after Banco Galicia, under the custody of Lirioand Brubank have permission to buy and sell bitcoin (BTC) and other cryptocurrencies to their customers in Argentina. As a result, these companies had to suspend service less than a week after launch.

Murrone described this sequence of events as “something normal and to be expected.” He explained that the role of innovators is to create different products, among which the bank brings to market those that are “more mature.” And then, he argued, the regulator comes in, whose function is to “take care of the end consumer,” so that it makes sense for it to be the “most conservative.” Limiting this disruption.

However, he reminded that what is important to understand is that cryptocurrency adoption can continue in the unregulated world.beyond regulators’ restrictions or bans. And he believes that “eventually it will be figured out (…) and in the medium term we will see what has happened elsewhere (i.e., that the Central Bank says ‘let’s put on hold to investigate’ until it is put in place).”

I think that’s very healthy, because you understand that you can’t regulate everything because the other thing will exist and you can’t put it off and take all the time in the world because there are alternative channels in the meantime. So I think what happened with Banco Galicia, which is a very traditional bank, was very disruptive because it was the first bank to implement something like that in Argentina.

Federico Murrone, founder and CEO of Lirium.

What is the way forward for banks to become cryptocurrency friendly?

At the conference, Candelaria Villagra, head of digital banking at BIND Financial Group, commented that. it is critical to involve the compliance team (regulatory compliance). He added that this is due to the need to understand the cryptocurrency industry. Mastercard’s Clegg added that there are three “Cs” that banks need to consider in order to enter the ecosystem: communication, education, and quality.

Regarding the first C, he stressed that “the exchange has to speak the language of the bank and the bank has to speak the language of the exchange,” so they should look for people who can understand each other in this regard. Regarding the second point, he said it is important to involve experts who can teach the bank team how cryptocurrency technology works. Third, he explained that it is essential to choose quality products to offer.

Agreeing with his conference partners, Murrone summarized that. “the bank needs to lose its fear of the (cryptocurrency) industry.”“. The president defended this choice because of the “level of maturity, development, solutions and tools it already has.”