The tongues are wagging. Since the surprise debacle of the cryptocurrency exchange platform FTX (declared bankrupt a month ago), bankers are not afraid to lecture and remind all the bad things they think for a long time about cryptocurrencies, without having dared to say it out loud until now.

Jamie Dimon, the boss of JP Morgan, the largest bank in the world, who had not waited for the FTX episode to criticize the players in the sector, is their best megaphone:

“Cryptocurrencies have never been currencies, but tokens. It looks in many cases like a decentralized Ponzi scheme. It's a casino, and in some cases, a fraud. It shocks me that this exists.”

European leaders don't mince words either, “Cryptocurrencies are pure speculation. Investing in these assets does not represent any positive contribution to the real economy,” said a European bank executive. Not hesitating, on this occasion, to oppose “opaque tools, poorly controlled” to conventional investment products sold by banks.

Of course, this European leader failed to mention the $2B payment from Danske Bank to the DoJ to turn the page on one of the biggest money laundering scandals in Europe that had impacted nearly $150 billion... It's always easier to falsely criticize Bitcoin than to look at ourselves probably.

Banks still complaining of too much supervision call for more supervision in the cryptocurrency world …

A few days after the announcement of FTX's bankruptcy, the boss of another European bank more soberly recalled “long ago warned its customers against the mirages offered to them in this universe.” For banks, this crypto winter, which has been going on for almost a year, since the trend in the Bitcoin market and other alternative digital currencies has turned around, sounds like a form of revenge.

While players like FTX dreamed of challenging the traditional financial system, in the light of Web3, here it comes out stronger, with a form of legitimacy and respectability, fifteen years after the financial crisis of 2008 ...

“The financial institutions are at this stage very little affected by the explosion of this speculative bubble,” says another European banker. These same banks, which usually do not hesitate to denounce the excessive supervision, according to them, of the supervisors against them, are pleased to advocate for more regulation suddenly.

“Cryptos must be regulated or disappear,” warns Jamie Dimon. “The repetition of market corrections cry out for stronger supervision,” agrees François Villeroy de Galhau, the governor of the Bank of France.

Useful technologies

Not unhappy to see the world of cryptos waver, traditional banks feel the same guilty pleasure in the face of the difficulties encountered by Fintechs since the beginning of the year. Lauded by investors in 2021, in a post-COVID world where money was flowing freely, they have seen their valuations plummet in 2022 amid rising rates and increased profitability requirements.

The champion of fractional payments, the Swedish Klarna, lost 85% of its value in July 2022, falling to 6.5 billion dollars. Some neo-banks have also seen their star fades, such as the German N26, forced to curb its growth to better comply with the rules in the fight against fraud and money laundering.

A return to reality that has delighted some banks, which had not appreciated being compared to dinosaurs promised to disappear in the face of these new financial players inspired by GAFAM. In the face of these shocks, bankers remain no less vigilant. While some markets may turn around, the developments driven by both the crypto and fintech worlds are here to stay.

“Cryptocurrencies are not dead. The uses need to be improved, but the underlying technologies are interesting,” confides an investment banking specialist.

Cheaper acquisitions

Banks are also keeping an eye out for opportunities that may arise in this context. The collapse of FTX and the disappointments of cryptos have whetted the appetite of Goldman Sachs. The famous American investment bank says it is ready to spend tens of millions of dollars to make cheap acquisitions.

European banks, meanwhile, remain interested in Blockchain technology but do not rule out a future role in the custody of crypto assets. They have also kept their appetite for financial startups, which they can afford without breaking their piggy banks given the market tensions. BNP Paribas, for example, got its hands on fintech Kantox in October, which specializes in automated foreign exchange risk management. At the same time, Societe Generale bought the payment start-up PayXpert.

The digitalization of financial services is on the move, and the threat of new players is not going to disappear. Banks know this. But if they can make a few good deals along the way, they won't miss out.

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