ניט דערמאָנען פון קריפּטאָ ווי יו. עס. באַנקס פּלאַן דיגיטאַל וואַללעט

Seven U.S. banks plan to launch a new digital wallet to stave off Apple Inc. and PayPal threats.

Several banks, including Wall Street heavy-hitters JPMorgan Chase, Wells Fargo, and Bank of America, are looking to reclaim market share from Apple Inc., whose Apple Pay service has proven extremely popular.

Digital Wallet Must Benefit from Dual Network Effects

לויט צו אַ מעלדונג by the Wall Street Journal, the service will likely ask the banks’ customers to enter their email addresses when paying. The merchant would identify eligible consumer cards using infrastructure provided by Early Warning Services, a fintech firm. Customers can load credit and debit cards from Visa and Mastercard.

While cards will be the primary payment method, a postive reception of the wallet could see banks adding other payment options, including direct payments from bank accounts.

However, the wallets could take a long time to gain mainstream adoption, according to analyst Harshita Rawat.

“It simply takes a very long time, a killer customer experience (which needs to be better than incumbents, not just similar), and a compelling merchant value proposition to build the two-sided network effects in payments to achieve scale,” Rawat דערציילט CNBC.

Holding Crypto Likely to Present Significant Hurdles

While no mention was made of crypto inclusion, banks face several hurdles if they offer digital currencies in their wallets. They must comply with stringent banking regulations and tailor risk management practices to protect consumer funds and prevent money laundering.

א פריש מעלדונג by the U.S. Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency said that banks with significant crypto exposure would be monitored. The agencies added that they will prevent unmanageable crypto risks from entering the banking sector.

In addition to compliance burdens, banks must decide which cryptocurrencies to offer in their wallet and simplify any technical hurdles to drive mainstream adoption. To accept crypto payments, banks must lock in an exchange rate between crypto and fiat to protect consumers from וואַלאַטילאַטי.

לויט to crypto payments company BitPay, consumers favored ליטעקאָין for purchases in 2022. Litecoin has lower transaction fees compared to its bigger brother, ביטקאָין. In contrast, customers used Bitcoin transactions for larger purchases.

JPMorgan CEO Jamie Dimon maintained in a recent interview at the 2023 World Economic Forum that Bitcoin is “a hyped-up fraud,” disparagingly פאַך the cryptocurrency “a pet rock.”

Wall Street banks may also avoid the סילווערגאַטע Exchange Network due to the institution’s שייכות with collapsed exchange FTX.

Silvergate’s network enables funds transfers between the bank accounts of קריפּטאָ קאָמפּאַניעס and traditional financial institutions. FTX customers apparently wired money to FTX via a Silvergate account belonging to FTX’s market maker Alameda Research.

Customers withdrew $8.1 billion from Silvergate after the FTX implosion, causing the crypto bank to borrow heavily and sell securities to survive. Deposits into Silvergate plummeted 68% in the fourth quarter.

פֿאַר זיין [אין] קריפּטאָ ס לעצט ביטקאָין (BTC) אַנאַליסיס, דריק דא.