Goldman Sachs announces a new crypto trading team in an internal memo

David Solomon
Goldman Sachs CEO, David Solomon.

Goldman Sachs formally announced the launch of its newly-formed cryptocurrency trading desk to markets employees, according to an internal memo obtained by Insider.

The team has successfully executed two types of bitcoin-linked trades – bitcoin non-deliverable futures and CME BTC futures, the bank said.

Members will report to Goldman partner Rajesh Venkataramani. It will function as part of the bank’s global currencies and emerging markets trading team within a division led by the global head of digital assets, Mathew McDermott.

Goldman had been weighing plans to create a crypto trading desk as early as 2017, according to CNBC. Thursday’s memo is the first time the US bank has formally acknowledged its involvement in the reported plans.

It plans to broaden its market presence by “selectively onboarding” crypto trading institutions to expand offerings, according to the memo.

CEO David Solomon said last month he expects a “big evolution” in the way bitcoin and other cryptocurrencies are regulated in the United States. “I’m not going to speculate on where the rules will go for regulated financial institutions, but we’re going to continue to find ways to serve our clients as we move forward,” he told CNBC in an interview.

A copy of the internal memo obtained by Insider is seen below:

May 6, 2021
Formation of Cryptocurrency Trading Team
I am pleased to announce the formation of the firm’s cryptocurrency trading team, which will be our centralized desk for managing cryptocurrency risk for our clients. The Crypto trading team will be a part of Global Currencies and Emerging Markets (GCEM), reporting to me, within the firm’s Digital Assets effort led by Mathew McDermott.

As a part of our initial launch, we have successfully executed Bitcoin (BTC) NDFs and CME BTC future trades on a principal basis, all cash settling. Looking ahead, as we continue to broaden our market presence, albeit in a measured way, we are selectively onboarding new liquidity providers to help us in expanding our offering.

In addition, yesterday we launched our Digital Assets dashboard which provides daily and intraday cryptocurrency market data and news to our clients. We invite you to highlight the dashboard to your clients. For more information on trade approval and onboarding, contact the Digital Assets team.

Please note, the firm is not in a position to trade Bitcoin or any Crypto Currency (inc. Ethereum) on a physical basis.

Rajesh Venkataramani

CNBC first reported the bank’s announcement.

Other large investment banks are also warming up to cryptocurrencies. JPMorgan, the largest US investment bank by assets, is actively working on offering a bitcoin fund to its private rich clients. Citi plans to launch crypto trading services after seeing surging interest from clients, according to the Financial Times.

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JPMorgan teams with Singapore’s DBS and Temasek to form a blockchain payment platform

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In this Aug. 16, 2019 photo, the logo for JPMorgan Chase & Co. appears above a trading post on the floor of the New York Stock Exchange in New York.

  • JPMorgan Chase announced it is teaming up with Singapore’s DBS Group and Temasek to form a blockchain payments platform.
  • The platform aims to ease frictions for cross-border payments, trade, and currency settlements.
  • The new company, dubbed Partior, will leverage blockchain technology and digitize M1 commercial money.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

JPMorgan Chase announced it is teaming up with Singapore’s DBS Group Holdings and Temasek Holdings to form a blockchain payments platform in a bid to ease cross-border payments, trade, and currency settlements.

The newly-established technology company, Partior, will leverage blockchain technology and digitize M1 commercial money, according to a statement Wednesday.

The platform will develop wholesale payment rails based on digitized commercial bank money to enable “atomic” or instantaneous settlement for various kinds of financial transactions, according to a statement.

“We are thrilled by the launch of Partior as it marks yet another milestone for JPMorgan and the industry – blockchain-based wholesale payments infrastructure where information and value can change hands around the world in a 24/7, frictionless way,” Takis Georgakopoulos, global head of wholesale payments at JPMorgan, said in a statement.

Partior will be designed to complement ongoing central bank digital currencies initiatives and use cases.

In the beginning, Partior will focus on facilitating flows primarily between Singapore-based banks in both US and Singapore dollars but will expand its service offerings to other markets and currencies.

Headquartered and listed in Singapore, DBS is a financial services group in Asia active in 18 markets.

Temasek, also based in Singapore with 11 global offices, is an investment company with a portfolio of $214 billion as of March 2020.

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Despite the GameStop saga and Archegos implosion, banks and hedge funds had a blowout quarter. This is how they did it.

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Goldman Sachs brushed off Archegos to post a huge profit increase.

It’s been a dramatic year for financial markets so far. Retail traders pumped up GameStop in January, captivating the financial world and whacking hedge funds who had been betting against the stock.

Then in March, the Archegos investment fund spectacularly imploded, wiping out a $20 billion fortune and sending banks scrambling to distance themselves from the collapse.

Yet, despite this turbulence, banks and hedge funds just had one of the best quarters in recent memory, smashing expectations and earning big bucks for their clients.

How did they do it? JPMorgan boss Jamie Dimon put it well himself when his bank’s earnings came out: “Stimulus spending, potential infrastructure spending, continued quantitative easing, strong consumer and business balance sheets and euphoria around the potential end of the pandemic.”

Hedge funds turn it around after rocky January

The year got off to a bad start for many hedge funds, when a band of online retail traders decided to pump up GameStop stock. A number of high-profile funds, who had been betting against the ailing company, were hit hard.

A narrative built up in the media and among the retail investors themselves that a day-trading army was laying siege to Wall Street. And in some places it was: Gabe Plotkin’s Melvin Capital, for instance, was left nursing a 49% loss on its investments in the first quarter, according to reports.

But the GameStop saga was only felt by a handful of firms, says Andrew Beer, managing member at Dynamic Beta Investments, an investment firm that follows some hedge-fund tactics.

Hedge funds made a gain of 4.8% in the first three months of 2021, the best first-quarter performance since the heady days before the financial crisis, according to data from Eurekahedge. North American hedge funds gained 6.8%.

“GameStop to me was a tempest in a teapot,” Beer told Insider. “Most funds actually did fine… because what was more important for them was getting the value rotation right.”

The first quarter saw volatility in stock markets as investors positioned for stronger growth, rotating out of big tech into stocks in neglected sectors such as finance and industry.

Beer says that with the market going through “regime changes,” hedge funds did well because they had the flexibility and agility “to be tech investors in 2019, but value investors and small-cap investors today.”

There were also opportunities for hedge funds who specialize in betting against, or shorting, stocks, says Mohammad Hassan, head analyst at Eurekahedge.

“The growth factor struggled in Q1, creating opportunities on the short side of the book for hedge fund managers as non-profitable technology stocks got a ‘speeding ticket’, so to speak,” he told Insider.

Banks smash earnings expectations as market income booms

Wall Street’s banks also escaped largely unscathed from the Archegos implosion. Morgan Stanley posted a record profit despite taking a $911 million hit tied to the fund.

Like hedge funds, the big banks also reaped rewards from highly active financial markets, helping big names like JPMorgan and Goldman Sachs wow analysts with record earnings.

Earnings at S&P 500 banks grew a staggering 248% year on year, according to FactSet. Investment banking revenue at Goldman Sachs shot up 105% as the lender’s traders cashed in on rising and volatile markets.

Even at the more consumer-focused Bank of America, sales and trading revenue rose 17% as clients played the market, helping its profit more than double.

The boom in retail trading, which lay behind the GameStop saga may also have helped, says Filippo Alloatti, senior credit analyst at Federated Hermes.

“[Retail investors] may trade with some of the bank’s platforms, but [it also] brings more inflows into equities and therefore facilitates equity capital market business,” he told Insider.

Crucially, the brightening in the economic outlook after the arrival of COVID-19 vaccines. In addition, the announcement of more major stimulus measures helped banks release $10.2 billion from the provisions set aside to cover loan losses, according to FactSet.

“There’s just no doubt that the… bear case scenarios that the banks had put into those forecasts around building their loan-loss reserves have gotten less bad,” Ken Usdin, US banking analyst at Jefferies, tells Insider.

But there are a few dangers on the horizon for banks. Although many of those involved seem to have escaped the Archegos affair unscathed, Swiss lender Credit Suisse is still struggling and similar events could yet have broader ramifications.

Meanwhile, banks’ traditional business of making loans has slowed, as stimulus money has helped people pay down their debts.

The Federal Reserve looks set to keep the party going

Underlying the very strong quarter for banks and hedge funds has been the Federal Reserve, analysts say, which has made borrowing ultra-cheap and pumped cash into the economy and markets.

William McChesney Martin, Fed chair in the 1950s, famously said the Fed’s job is to provide the punch at the party but take it away just as things start warming up.

Beer said this no longer seems to be the case, with the central bank saying it wants to see a hot jobs market and will tolerate higher inflation. “The Fed has basically said, here’s the punch bowl, have at it, and the party is going to go on well past curfew,” he said.

JPMorgan’s Dimon is bullish, despite residual concerns about lower loans and rising coronavirus cases around the world, saying: “We believe that the economy has the potential to have extremely robust, multi-year growth.”

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Credit Suisse posts Q1 loss of $275 million after Archegos blowup and says it expects more pain from the fund’s implosion

credit suisse blunders 2x1
Thomas Gottstein, Credit Suisse CEO.

Credit Suisse, Switzerland’s second-biggest bank after UBS, reported first-quarter earnings on Thursday that showed the bank witnessed a slightly narrower net loss than analysts had expected.

A net loss of 252 million francs ($275 million) beat the 815 million francs ($890 million) mean estimate conducted by the bank’s own poll of analysts.

The bank said it had exited 97% of its trading positions related to a US-hedge fund. Credit Suisse has consistently been reluctant to name the fund, but the bank has cushioned the blow from its remaining exposure to Archegos Capital.

It expects to incur related losses of another 600 million francs ($654 million) in the second-quarter this year and said it would raise $2 billion to shore up its capital, in the aftermath of the hedge fund’s collapse.

Here are the key numbers:

  • Net Revenue: CHF 7.6 billion ($8.3 billion) versus CHF 5.2 billion ($5.6 billion) in Q4
  • International wealth management pre-tax profit: CHF 523 million ($571.3 million) versus CHF 442 million ($482 million) estimated
  • Revenue from investment-banking division: CHF 3.9 billion ($5.4 billion) versus CHF 2.2 billion ($3 billion) a year ago
  • Net loss: CHF 252 million ($275 million) versus CHF 353 million ($385 million) in Q4

“Our results for the first quarter of 2021 have been significantly impacted by a CHF 4.4 billion charge related to a US-based hedge fund,” CEO Thomas Gottstein said in a statement. “The loss we report this quarter, because of this matter, is unacceptable.”

“Among other decisive actions, we have made changes in our senior business and control functions; we have enhanced our risk review across the bank; we have launched independent investigations into these matters by external advisors, supervised by a special committee of the Board; and we have taken several capital-related actions,” he added.

Swiss regulator FINMA announced the same day that it has opened enforcement proceedings against the bank after it suffered losses in connection with Archegos.

Credit Suisse has emerged as the hardest-hit among the banks affected by the Archegos collapse. Other banks were quicker to wind down their related positions, leaving them relatively unscathed. The Swiss lender was already battling with a controversy linked to supply-chain finance as it had $10 billion worth of funds tied to Greensill Capital.

The impact on Credit Suisse from both the Archegos and Greensill saga could add up to $8.7 billion, Bloomberg reported, citing JPMorgan analysts.

Shares in Credit Suisse fell 5% in early European trading.

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US stocks rise after three top Wall Street banks crushed earnings and a lively Coinbase listing

nyse surprised trader
  • US stocks rose on Thursday following blockbuster earnings results from three large banks.
  • Coinbase made its splash on the Nasdaq, closing its first day of trading at a valuation of $86 billion.
  • Fed Chair Powell said the central bank will scale back bond purchases before lifting interest rates.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks edged higher on Thursday after three of the largest US banks beat analyst expectations with their first-quarter results, and Coinbase began trading at a valuation of more than $100 billion.

The crypto exchange’s shares closed 14% lower at $328.28 per share on Wednesday, giving it a valuation of $86 billion on a fully diluted basis.

Futures on the Dow Jones, S&P 500, and Nasdaq rose between 0.3% and 0.6%, suggesting a higher open for US indices later in the day.

JPMorgan reported a 25% jump in trading revenue even as analysts expected lower volumes across the market, with an overall revenue of $33 billion for the quarter. Revenue estimates were $30.4 billion.

Goldman Sachs too posted a profitable quarter on the back of strong trading and deal-making. Wells Fargo’s earnings topped estimates as its quarterly net income rose to $4.7 billion, helped by a larger than expected release of loan loss reserves.

Fed Chairman Jerome Powell reiterated on Wednesday the central bank won’t taper its emergency asset purchases until it sees progress on its goals of above 2% inflation and maximum employment. Powell disclosed he hasn’t had conversations on policy with President Joe Biden – a sharp contrast from how former President Donald Trump frequently urged the Fed to lower interest rates and critiqued its independence.

Elsewhere in Europe, ECB President Lagarde said at a Reuters event the euro zone economy is still standing on “two crutches” of monetary and fiscal stimulus, and they shouldn’t be removed until full recovery.

Members of the ECB are scheduled to meet next week for the first time since they increased the pace of the Pandemic Emergency Purchase Programme to decelerate the surge in bond yields.

London’s FTSE 100 rose 0.3%, the Euro Stoxx 50 rose 0.2%, and Frankfurt’s DAX rose 0.4%.

Asian markets were trading lower aside data showing India reported a record 200,000 new coronavirus cases.

Shares in Japan firms with strong Chinese ties declined ahead of Prime Minister Yoshihide Suga’s meeting with President Joe Biden, as investors are wary of potential pressure to align with Washington’s tough stance on Beijing.

China’s Shanghai Composite fell 0.5%, Japan’s Nikkei gained 0.07%, and Hong Kong’s Hang Seng fell 0.4%.

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Mohamed El-Erian says the Archegos blow up is a ‘one-off’ but it may lead to tightening financial conditions as banks become more cautious

Mohamed El-Erian
Mohamed El-Erian, Chief Economic Advisor of Allianz and Former Chairman of President Obama’s Global Development Council, speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., May 1, 2017.

  • Mohamed El-Erian said the Archegos blow-up is a “one-off” in a CNBC interview Monday.
  • The Allianz chief economic adviser added he doesn’t believe it will lead to a “fast-moving contagion” in the markets.
  • El-Erian did warn investors about “tightening financial conditions” if banks become more cautious as a result.
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Mohamed El-Erian says the Archegos blow-up is a “one-off,” but it may lead to a tightening of financial conditions as banks become more cautious.

Over the weekend reports came out that showed Archegos Capital Management had been behind roughly $20 billion worth of block sales of companies like ViacomCBS and several Chinese tech stocks including Tencent and Baidu.

The sales came after the hedge fund failed to meet margin calls from Credit Suisse, Nomura, and Goldman Sachs.

Queen’s College President and Allianz chief economic advisor told CNBC on Monday that he believes the incident was a “one-off,” caused by Archegos’ “highly concentrated positions”, “massive leverage”, and “derivative overlay on top of that.”

El-Erian said that he doesn’t see a “fast-moving contagion” spilling over and creating a significant market sell-off, adding that “for now it looks contained.”

The Allianz chief economist did say investors should be keeping an eye on “slower-moving contagion forces” which might cause a “tightening in financial conditions” forcing banks to become more cautious.

“There’s been so much liquidity sloshing around the system that there has been excesses and we’ll get fender benders like this one, but what we don’t want is a pile-up, and that’s why it’s really important to look at these slow-moving contagions,” El-Erian said.

El-Erian said he hoped the Archegos blow-up would lead to “better discipline in the marketplace because we’ve lost a lot of discipline.”

He added that Archegos’ positions, overall, are a “small” portion of the market, but said it could cause banks to make changes.

“I can tell you that in a lot of investment houses right now, and banks, people are being asked look how we are positioned, who are we exposed to, do we have enough margin, is the collateral moving or not, and all that causes somewhat of a slowdown in the system,” El-Erian said.

When asked what caused Goldman Sachs to force the liquidation when it did, the Queen’s College President said that “price action”, “how big was the margin overall”, and desire to move first and catch other banks “offsides” was the reason Goldman made its liquidation call.

Goldman Sachs told Bloomberg that its losses from the Archegos liquidation were “immaterial” while Nomura and Credit Suisse both face “significant” losses after the blow-up.

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Bank stocks tumble as yields falling from 14-month high pause interest-income optimism

Wells Fargo ATM
A row of Wells Fargo ATMs.

  • Bank of America, Wells Fargo and other bank stocks fell Monday as the 10-year Treasury yield declined.
  • The closely watched yield tied to a range of lending programs fell about 5 basis points from a 14-month high.
  • The SPDR S&P Bank ETF lost 3% on Monday, marking a second straight loss.
  • See more stories on Insider’s business page.

Bank stocks dropped Monday, with a widely watched bank ETF pulling further away from a 13-year high as borrowing costs tracked by the 10-year Treasury yield edged lower.

Bank stocks in recent sessions have been gaining as the 10-year Treasury yield and other long-dated yields rise while investors price in expectations of stronger inflation as the economy recovers from the COVID-19 pandemic. Banks seeking to lend money can see interest income improve when long-dated yields rise.

The 10-year yield, which is tied to lending programs including mortgages and auto loans, fell Monday by nearly 5 basis points to 1.68% from 1.73% on Friday when it reached its highest since January 2020.

Shares of Bank of America declined 2.6%, Citigroup fell 1.4%, JPMorgan shares of JPMorgan Chase lost 3.3% Wells Fargo declined by 1.7%.

Those moves also contributed to pressure on the SPDR S&P Bank ETF on Monday. It slumped 3% to mark a second straight loss. The index fell on Friday after the Federal Reserve decided to let a rule expire that relaxed capital requirements to encourage bank lending during the COVID-19 crisis. The rule change for the supplementary leverage ratio, or SLR, will expire as scheduled on March 31.

With the recent run higher in bank stocks, the SPDR S&P Bank ETF on March 12 logged its highest settlement since September 2007.

Meanwhile, the 10-year yield has climbed from around 0.9% since the start of 2021.

“While such a percentage increase in yield is dramatic from a percentage point of view the likely reality is that the move in yields may suggest that ‘things’ are indeed ‘getting better’ and pointing toward re-openings in areas of the US economy that have been shuttered or near shuttered for much of the duration since the rise of the pandemic last year,” wrote John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, in a note Monday.

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Treasury yields spike to highest in 14 months, pulling tech stocks down while boosting banks

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Fed Chairman Jerome Powell.

  • The 10-year Treasury yield pushed past 1.7% on Thursday, marking a fresh 14-month high for the benchmark note.
  • The 30-year yield also made a notable move by rising to 2.5% for the first time in more than a year.
  • Tech stocks were losing ground but bank shares advanced on the back of richer yields.
  • See more stories on Insider’s business page.

Borrowing costs quickly picked up pace Thursday as the benchmark 10-year Treasury note yield surged to a fresh 14- month high, with the move pressuring tech stocks but bolstering bank shares.

The 10-year yield climbed to an intraday high of 1.754%, a leap of nine basis points since ending at 1.64% on Wednesday. Meanwhile, the 30-year yield on Thursday rose to 2.5% for the first time since August 2019. That yield on Wednesday settled at 2.437%.

Investors keep a close watch on long-dated yields as they are tied to a range of lending programs such as mortgages and auto loans. Yields have been rising, while bonds sell off, as investors continue to price in expectations of higher inflation as the US economy recovers from the COVID-19 crisis.

But the increase in borrowing costs has stoked selling in growth stocks, including large-cap tech stocks that have run up over the past year. Thursday’s moves included Apple falling by 2.3%, Google’s parent company Alphabet down by 1.1%, and Microsoft losing 1.7%. The Nasdaq Composite, home to numerous tech stocks, lost 1.4%, and the S&P 500‘s information technology sector slumped 1.5%.

The 10-year yield on Wednesday reached its highest since January 2020 as investors positioned themselves before the Federal Reserve released its policy decision and economic projections. The central bank’s upgraded economic outlook included its view that gross domestic product will expand by 6.5% this year, up from the prior estimate of 4.2%. The 10-year yield pulled back from the 1.6% area during Wednesday’s session before roaring higher again on Thursday.

“Right now the market is pricing in a rate hike in the latter half of 2022, which we think is very early and, in fact, it’s nearly mathematically impossible for the Fed to hike in 2022 if they truly intend to look past transitory inflation,” Calvin Norris, US rates strategist at Aegon Asset Management, told Insider on Thursday. “What the market is implying is the Fed is going to cave on this persistency-of-inflation idea.”

Fed Chairman Jerome Powell on Wednesday reiterated the central bank’s stance of allowing inflation to rise past 2% to support growth in the labor market and the economy before it starts raising interest rates.

While tech stocks sold off, bank stocks charged up, with Bank of America gaining 4.1%. Banks aim to lend money on long-term rates and the increase in long-dated yields improves their prospects for growth in interest income.
Wells Fargo climbed 3.8% and JPMorgan Chase popped up 3.5%.

Also, the Invesco KBW Bank ETF tacked on 3% and the SPDR S&P Regional Banking ETF gained 3.2%.

“While it’s difficult to say when this might occur but we’re kind of setting the stage for some type of counter-trend rally here in Treasuries,” said Norris. “Treasuries are oversold, sentiment is extremely bearish, Treasuries are very cheap to foreign buyers,” he said.

“I think the market is trying to challenge the Fed. But if you do believe the Fed and the projections for growth and inflation, valuations look very attractive at these levels. Not to say that they can’t get cheaper and be more attractive but we’re at those levels that I think it’s difficult to add to short positions in here,” Norris added.

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Big banks, including Deutsche Bank and Bank of America, are testing employees for COVID-19 before they step into the office. Insider took a closer look at their plans.

Arizona covid-19 testing coronavirus
Physician John Jones, D.O. tests administrative assistant Morgan Bassin for COVID-19 at One Medical in Scottsdale, Arizona.

  • As COVID-19 continues to spread, big banks worldwide are monitoring staff that come into the office.
  • Deutsche Bank, Credit Suisse, and BoA are all testing employees for COVID-19, sources told Insider.
  • JPMorgan and Wells Fargo said they require employees to complete a health check before they arrive.
  • Visit the Business section of Insider for more stories.

Major banks worldwide have launched COVID-19 testing programs in order to enable a return to work for some employees during the pandemic.

Some banks are offering their staff lab-based PCR tests, which are considered the most accurate way of detecting coronavirus, but they can cost around $100 to process, per The New York Times. Results of PCR tests usually come back within a couple of days.

Other banks are providing antigen tests, also known as lateral flow tests, which give results in about 15 to 30 minutes. Both antigen and PCR tests require swabbing the nose or throat.

“I have been back at work since the start of the year and have been asked to produce three negative test results every week,” a source who works in a bank in London told Insider on the condition of anonymity. “It’s a bit stressful but the antigen tests are quick and I have got into a nice routine now. It’s also nice to be able to go back to work, although I miss the pre-COVID office environment,” they said.

However, a number of other banks are asking employees to fill out questionnaires about possible symptoms and exposure to the virus before they come into the workplace.

Insider spoke with sources working in banks across the world to get a sense of return-to-work plans. 

Deutsche Bank

Twice a week, Deutsche Bank is testing UK employees considered key workers that work on the busiest floors in the office, sources familiar with the system said. They are being tested with PCR tests. It’s unclear whether staff working on other floors are being also tested.

Deutsche Bank declined to comment to Insider.

Bank of America

Bank of America is testing employees on a weekly basis if they’re coming into the office, according to sources familiar with the matter. The testing is currently targeted at UK offices, and there are plans to roll out the tests to the rest of Europe, the Middle East, and Africa region. 

Bank of America declined to comment.

Read more: Bank of America has promoted 86 managing directors in its sales and trading, research, and operations groups – here are all the names

JPMorgan

JPMorgan told Insider that employees coming into the workplace in all locations are required to take a daily health check before entering an office. The health check is a survey that can be completed via mobile or laptop, and asks if you’ve been exposed or in close contact with someone who is infected with COVID-19 or showing related symptoms.

The bank said the daily health checks had been in place since the pandemic began in March.

On top of this, JPMorgan is also sending at-home testing kits to staff, if they want one. Employees are also able to book a PCR COVID-19 test at one of the bank’s on-site health and wellness centers.

Wells Fargo

A Wells Fargo spokesperson confirmed to Insider that all workers who go into the bank are required to complete a self-screening assessment, which involves filling out a questionnaire about whether they have symptoms or have been exposed to COVID-19. They must complete this every day before entering the workplace, the spokesperson said.

In its largest US locations, the bank has an on-site nurse to check staff for COVID-19 symptoms and refer them for testing.

Credit Suisse

Sources familiar with the situation at Swiss bank Credit Suisse said it is offering its staff in London weekly testing, despite only a small number of them coming into the workplace. Credit Suisse declined to comment.

Citibank and Barclays could not be reached for comment. HSBC didn’t respond to Insider’s request for comment.

Are you an employee in the banking sector being tested for COVID-19 on a daily basis? Get in touch with this reporter via email: kduffy@insider.com.

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JPMorgan and Citi are using blockchain technology, and other banks are considering allowing clients to hold crypto in bank accounts, Bank of America research finds

FILE PHOTO: The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. Picture taken October 19, 2017. REUTERS/Chris Helgren/File Photo
  • Bank of America research published Tuesday shows banks like JPMorgan and Citi use blockchain technology. 
  • Other smaller banks said they are open to allowing clients to hold cryptocurrencies in the future. 
  • The research sheds on light on where traditional financial institutions stand on blockchain amid bitcoin’s massive rally.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

A research report from Bank of America shows banking behemoths JPMorgan and Citi are using blockchain technology, while other banks are considering allowing commercial and institutional clients to hold cryptocurrencies in their accounts. 

BofA analysts led by Erika Najarian compiled responses from banks they cover regarding use of blockchain technology and willingness to facilitate crypto transactions. 

They found that 21% of banks they cover have incorporated blockchain technology into their businesses in some form. Blockchain is a digital ledger and the technology used to transact with cryptocurrencies like bitcoin.

JPMorgan, Citi, Wells Fargo, US Bancorp, PNC, Fifth Third Bank, and Signature Bank are among some of the banks that said they use blockchain.

While JPMorgan and Citi did not specify in what capacity they use blockchain technology, Wells Fargo highlighted its WFC Digital Cash platform, which allows investors to transfer accounts between Wells subsidiaries. Meanwhile Fifth Third said blockchain technology is in use “in very limited cases for sensitive information.” PNC was the first US bank to join the Ripple network. 

Meanwhile, no banks under BofA coverage are facilitating crypto transactions or allowing customers to hold crypto in accounts at this time. However, Citizens Financial Group said they are open to allowing clients to hold crypto in theory at some point, but would need to develop a robust anti-money laundering infrastructure. US Bancorp told BofA they’re “currently looking at applications of blockchain technology and crypto opportunities at the commercial bank.”  

Several banks said they are waiting for regulatory clarification on providing cryptocurrency custody services before adopting the digital currency. 

According to BofA analysts who conducted the study, the consensus among banks was that any future application of cryptocurrency would be concentrated in commercial, custody, and commercial payments rather than retail clients. 

Also, Citi is “more focused on tokenization” than facilitating cryptocurrency transactions, according to BofA, while JPMorgan is “actively assessing if they will take cryptocurrency in accounts.” 

The research sheds a light on where major financial institutions stand with regards to blockchain technology and cryptocurrency amid bitcoin’s epic rally. 

“While the future of cryptocurrencies is still oft-debated by the market, many investors view blockchain broadly as general ledger technology that is key for banks to unlock efficiencies in the future. As such, we see this wide gap in blockchain technology (and willingness to adopt it) as potentially telling of a bank’s tech investment strategy,” the analysts said. 

 

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