Barclays Explores Cryptocurrency Trading Desk Despite Denying Interest
Barclays has reportedly appointed a team of three senior executives to look into the feasibility of setting up a crypto trading desk to function as part of its markets business. According to a report in the London Financial News on August 6, 2018, the bank wants to follow in the lead of other large institutional investors who have been convinced of the merits of crypto trading.
“Digital Assets Project”
According to the report, Barclays has put together a senior team with the objective of exploring how the bank can find some value in the fast-growing crypto trading space which is expected to welcome an influx of institutional investment in the coming months.
BTCManager reported in May 2018 that JPMorgan Chase Bank opened its dedicated crypto trading desk in May, becoming the first globally recognized bank to do so.
Using information gleaned from his LinkedIn profile, the report stated that Barclays energy trading chief Chris Tyrer has moved from his previous position into a new role at the bank where he leads a newly-created “digital assets project.”
The project seeks to evaluate the possibility of integrating a trading desk for digital assets into the bank’s main business model and ultimately to produce a workable business plan. Since joining Barclays from commodities trader Mercuria, Tyrer has headed the bank’s energy trading division under dynamic market conditions roughly comparable to crypto trading.
The information gathered from LinkedIn also revealed that he would work with Barclays head of FX and emerging markets macro strategy, Marvin Barth, and Barclays Investment Bank senior technologist, Dr. Lee Braine who has been in charge of the bank’s in-house blockchain technology team since 2015.
The move is not free of controversy as it emerged at the same time as a public statement from Barclays denying any plans to start a crypto trading desk, stating instead that it only monitors and pays attention to developments in the space.
In-House Divided Opinions?
Barclays Chief Executive Jes Staley has been vocal about his opposition to entering the crypto trading market because of perceived difficulty surrounding regulatory frameworks and compliance in digital assets trading.
Explaining his opposition at the bank’s Annual General Meetin in May 2018, he said:
“Cryptocurrency is a real challenge for us because, on the one hand, there is the innovative side of it and wanting to stay in the forefront of technological improvement in finance. On the other side of it, there is the possibility of cryptocurrencies being used for activities that the bank wants to have no part of.”
For many within the bank who know about the project, however, cryptos have substantially more merits than demerits, offering the potential for long-term value creation. The bank is apparently leaning toward the crypto-positive side of things, driven in part by heightened client interest in cryptocurrencies.
With the launch of the new project, Barclays joins BlackRock and JPMorgan Chase Bank as one of the few global financial institutions with teams dedicated to developing a profitable entry strategy into the crypto market.