Barclays Weighs Cryptocurrency Trading Desk Launch - Report

The UK bank said to gauge customers’ interest in trading crypto

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26 April • 2.5 min
In News

British banking giant Barclays is said to consider the launch of a cryptocurrency trading desk, Bloomberg reported on Tuesday, citing anonymous sources.

Barclays is believed to have conducted a preliminary assessment of feasibility and demand for such an operation. The bank’s spokesman Andrew Smith said no specific plans for cryptocurrency trading were made but did not deny considering this option. “We constantly monitor developments in the digital currency space and will continue to have a dialog with our clients on their needs and intentions in this market,” Smith said in an emailed statement, as quoted by Bloomberg.

Starting a cryptocurrency trading desk would require approval from Barclays International President Tim Throsby and group CEO Jes Staley, a source familiar with the matter revealed to the newswire.

In September 2017, Throsby pledged to reignite Barclays’commercial zeal” and authorized the transfer of billions of dollars of capital to higher-risk activities. Thus, a cryptocurrency trading desk may fit the bank’s strategy due to the volatile nature of the digital money market, Bloomberg said in its report.

The introduction of a crypto trading desk in the traditional banking system will be a long-awaited move for hedge funds that deal with Bitcoin (BTC) and other digital currencies. The number of crypto-focused funds reached 226 in February, up from 37 at the start of 2017, according to data provided by Autonomous Research.

Despite the growing demand, no other big European investment bank is known to be building a cryptocurrency trading desk, but US rival Goldman Sachs has reportedly been weighing the option. The speculation emerged in December and pointed to a June deadline for the launch, but CEO Lloyd Blankfein later denied the rumor.

In January, Goldman Sachs released a report that referred to cryptocurrencies as real money, in reference specifically to its use in developing economies. Previously, in November 2017, Blankfein said that while he believes that Bitcoin will probably not work out in the long term, he is open to the idea of BTC trading if it ever becomes more established as a currency.

Unlike Goldman Sachs, Barclays has recently taken a critical tone on Bitcoin. A client note issued last week argued that interest in Bitcoin spreads like a disease. The analysts divided the pool of potential investors into three groups: susceptible, infected and immune. The analysts assumed that when prices rise, “infections” spread by word-of-mouth. But at some point, the number of potential hosts would be used up, causing prices to plateau before eventually falling.

“The most recent peak may have been the ultimate top,” they wrote. “The speculative froth phase of cryptocurrency investment, and perhaps peak prices, may have passed.”