There are rumors that a state banking organization moved its funding after being convinced to do so by the defunct cryptocurrency platform FTX in exchange for a small profit.
The Wall Street Journal article published presently contained the most recent revelation. However, the report made clear that the banks decreased to take advantage of the FTX offering.
Failed negotiations for investments
The failed negotiations were revealed in a report, but no specific bank was named.
The Wall Street Journal, however, reported that it had interviewed an employee at one of the banking companies who had turned down the proposal.
As for the bankers, at the time of the offer, FTX was seeking funding. According to a report from bankers, the trader started calling Bahamas banks up till the end of the previous year with odd offers.
The offer was made to banks to entice them to deposit money on FTX’s platform for lending cryptocurrencies in exchange for interesting interests at about twelve percent.
Fidelity CEO Gowon Bowe spoke with Guardian Business about the revelation during the interview.
A deal like the one proposed by FTX, according to Bowe, would be beyond the means of many regional banks.
The liquidity crisis that FTX experienced in relation to its inner coin caused it to finally collapse three weeks ago.
Low-risk banking
Commercial banking companies regulate liquidness of their assets with the least amount of risk imaginable, continued Bow. And in his view, cryptocurrencies do not fit into this low-risk category.
Bow clarified that the offer would not be taken into consideration because the local bank would have to handle the management and administration of the currency of the other country because the trading deals must be executed using the USA dollar.
According to Bowe, FTX’s goal was to find strategies for persuading banking companies to place their finances on exchanges to get the possibility of greater returns. However, it seems to be an outdated proverb.
The risk increases with increasing return
Bow added that while commercial banks were not willing to take risks with volatile prices, they were prepared to take regulated risks in the long run.
It’s possible that some banks will take this risking conditions, but it will probably be very large, international banking organizations.
The described establishments might either be a retail or investing banking divisions, and they choose cryptocurrencies as a way to invest money, using stakeholders funding rather than depositor funds.
