This is a fundamental analysis of how banks choose cryptocurrencies for investment
During the first years of crypto emergence banks and governments considered it a threat rather than an opportunity. It was because the price of cryptocurrencies has been volatile. It is a risk for banks, on the other hand, users can transact money without having to be identified by an individual bank account or a financial institution. This makes banks worried about money laundering and illegal activities.
Despite all of the arguments that banks as centralized financial institutes have against decentralized finance, currently, many banks prefer to invest in cryptocurrencies to provide the best financial services for their clients. In the meanwhile, they have some specific selection principles. The selected coin or token must be:
- The communicator between the blockchains. (Polkadot, Cosmos)
- Another platform alongside Ethereum to develop blockchain projects. (XDC, Solana, Cardano)
- Provides reliable data that serves smart contracts. (Chainlink, Chain)
- Helps domestic and international money transactions between banks. (Ripple)
- Provides transaction security for other blockchain networks. (Algorand, Orchid, Quantstamp)
- Supports the new technologies of metaverse and web 3.0. (Decenterland, The sandbox, Algorand, Filecoin)
- Save information with high security. (Filecoin, Stellar)
- Identify and eliminate scam or fraud processes within networks. (Lisk)
- Provides programmers with solutions for developing blockchain-based applications. (Lisk)
