BIS study: Crypto ownership not linked with distrust in fiat
The Bank for International Settlements (BIS), a global financial institution owned by central banks, recently published a paper on the socioeconomic drivers of cryptocurrency investments in the United States.
Using data from the U.S. Survey of Consumer Payment Choice, BIS argued distrust in fiat currencies such as the U.S. dollar has nothing to do with investor motivation to hold cryptocurrencies like Bitcoin (BTC), stating:
“Demand for cryptocurrencies is not driven by distrust in cash or the financial industry, given that there are no differences in the perceived security of cash and offline and online banking. We can thus preliminarily disprove the hypothesis that cryptocurrencies are sought as an alternative to fiat currencies or regulated finance.”
BIS noted that from a policy perspective, the overall takeaway of the analysis is that investors’ objectives are the “same as those for other asset classes, so should be the regulation.”
Cash and traditional banking services are ‘less convenient’
It was found that crypto owners are more likely to find cash and traditional banking services less convenient, though that doesn’t apply to online banking.
A higher level of education increases the likelihood of owning crypto, BIS found. The paper also outlines major correlations between crypto investment choices and the level of education and income, suggesting that cryptocurrency owners are “generally more educated than the average.” Ether and XRP investors showed the highest education level in the BIS’ analysis, while those owning Litecoin were the least educated, with Bitcoin owners ranking in the middle.
The new report shows that cryptocurrencies like Bitcoin pose no threat to traditional finance tools, as crypto demand is not driven by distrust in cash. A number of global authorities and institutions previously expressed concerns about Bitcoin’s ability to capitalise on global distrust in traditional finance.
In late December, Morgan Stanley Investment’s Ruchir Sharma argued that the U.S. dollar’s reign will likely end due to global distrust in traditional finance, while Bitcoin would capitalise on the lack of confidence.
Nymbus enters strategic partnership with Plaid
Nymbus, a leading provider of banking technology solutions, has partnered with Plaid, a data network powering the digital financial ecosystem, to more instantly authenticate and fund customer bank accounts for financial institutions.
This new integration will allow Nymbus bank and credit union clients to securely onboard new users in a matter of seconds, which in turn translates to more active and engaged banking experiences. Plaid’s data network enables consumers to connect their financial accounts at over 11,000 institutions globally to more than 5,000 digital finance apps, including leading payments, investing, and budgeting tools.
What are the benefits of the integration?
Benefits of the Nymbus and Plaid integration for financial institution customers include:
- Improve user identity verification and reduce fraud.
- Instantly authenticate and link members’ bank accounts.
- Streamline ACH transfers between any bank or credit union in the US.
- Access and analyse comprehensive transaction data.
- Validate real-time account balances to protect against overdraft and enable account pre-funding.
“As more consumers than ever before rely on digital finances for their everyday lives, financial institutions need to meet their customers where they are while supporting safe and reliable money management experiences,” said Sarah Howell, Chief Alliance Officer at Nymbus. “Our expanding network of partners are important contributors to Nymbus’ combined portfolio of the technology, people and process available to quickly innovate with new routes to market and revenue streams.”
Continuous growth and expanding partnerships
Founded in 2015, Nymbus has continued to grow. Most recently the company has closed a new round of financing led by the Curql Fund. The US$5 million investment will be used towards Nymbus CUSO and accelerate a shared commitment to breakthrough technology for ensuring continued growth and stability for the credit union community.
Nymbus CUSO was founded in March 2021 to help break through barriers to growth, and its mission is to connect credit unions with trusted fintech offerings that both simplify technology delivery and enable new digital revenue opportunities.
Last year Plaid set a goal to move 75% of its traffic to APIs by the close of 2021, calling it “one of our top priorities as the industry moves full-steam ahead toward a fully digital financial system.”
Recently it has announced an open finance partnership with Capital One, a digital finance innovator, and the successful completion of its migration to the Capital One API. They have also completed or have in-motion data access agreements with major US financial institutions, including U.S. Bank, JPMorgan Chase, Wells Fargo, and others.