Charles Schwab is interested in getting involved in crypto — just waiting for regulatory clarity

This article is from CryptoPotato, original author: Jordan Lyanchev

Odaily Planet Daily Translator | Nian Yin Si Tang

The number of U.S. financial institutions looking to launch cryptocurrency services continues to grow, with the latest to reveal its interest being Charles Schwab, a U.S. brokerage giant founded in 1971. Still, Schwab wants clearer U.S. regulations on digital assets before opening such products to the 32 million brokerage accounts that use its services.

Charles Schwab Enters Crypto Market?

Charles Schwab, a Texas-based multinational financial services company with over $3 trillion in assets under management (AUM), had earlier noted that it was eyeing the cryptocurrency space to launch related services for its user base of millions.

As reported in early March, Schwab is considering the possibility of launching a cryptocurrency brokerage business. Sources said the service would rely on technology from crypto partners.

Later, on April 9, it was reported that Charles Schwab was looking for a compliance director for its futures and foreign exchange team. The responsibilities specified in this position include "establishing a virtual currency compliance program" and the incumbent is required to have relevant work experience.

According to The Street, Charles Schwab CEO Walt Bettinger told company analysts what changes must be made before the company enters the crypto space:

“We would like to see more regulatory clarity. If that happens, Schwab will be involved in crypto just as it is a player in other investment opportunities.”

Furthermore, Bettinger claimed that if Schwab did launch such a service, the company “would be highly competitive, disruptive, and customer-oriented.”

The United States has put forward some ideas on how to introduce a legislative framework in the field of digital assets. The previous proposals made by the Financial Crimes Enforcement Network (FinCEN), an agency under the U.S. Treasury Department, were strongly opposed by crypto companies and were shelved after the Biden administration took office pending further review.

In late December 2020, FinCEN proposed a new proposed rule that, if adopted, would require regulated companies to verify the names and addresses of non-custodial wallet users for transactions greater than $3,000. In addition, exchanges will also need to submit and store records involving cryptocurrency transactions. The document was published in the Federal Register on December 23, 2020, and the public comment period ended on January 4, 2021. After facing opposition from many parties, FinCEN repeatedly extended the comment period for the proposed crypto regulations.

Crypto industry bigwigs have expressed protests. For example, Twitter CEO Jack Dorsey wrote a message urging US government authorities not to pass FinCEN's proposed crypto wallet rules.

In addition to this controversial proposed regulation, it was recently reported that Treasury Secretary Janet Yellen and newly appointed SEC Chairman Gary Gensler are also working to improve regulatory clarity.

Schwab may be waiting for the right moment.

US giants providing encryption services

Considering that several giants have entered the market in recent months, it is understandable that Charles Schwab is interested in launching cryptocurrency services.

In February this year, BNY Mellon, the oldest bank in the United States, announced that it would hold, transfer Bitcoin and issue other cryptocurrencies on behalf of its asset management clients, and cooperate with Fireblocks on cryptocurrency custody services. It is reported that BNY Mellon's digital asset custody platform will be launched later this year.

In early April, State Street, the second oldest bank in the United States, announced a partnership with Pure Digital to establish a digital currency trading platform, with plans to launch cryptocurrency trading in the middle of this year.

Goldman Sachs has relaunched its digital asset trading platform and announced at the end of March that it will soon offer its first Bitcoin and other digital asset investment tools to its private wealth management group clients, with the goal of starting to invest in emerging asset classes in the second quarter. Goldman Sachs is considering eventually offering a "full range" of investments in Bitcoin and digital assets, whether through physical Bitcoin, derivatives or traditional investment tools. It is reported that Goldman Sachs' private wealth management business is mainly aimed at individuals, families and endowment funds, with a minimum investment of US$25 million.

Morgan Stanley's crypto services were also disclosed that month. The Wall Street giant allows its institutional clients to gain exposure to Bitcoin through three funds and apply for up to 25% Bitcoin exposure for some of its 12 proprietary funds. Later this month, Morgan Stanley has confirmed that it will provide Bitcoin exposure to its wealth management clients through two external cryptocurrency funds. If clients show greater interest, Morgan Stanley will work with regulators to provide more suitable crypto services.