Legacy Banking Embraces Digital Assets and Crypto Custody

Over 200 years old, Groupe Caisse des Dépôts is the premier state-run bank of France, and it is not what one typically imagines when considering digital asset development. Nadia Filali, Head of Caisse des Dépôts Blockchain Program is looking to change that. She sees the use of blockchain as the perfect collaboration opportunity between traditional banks and startups, a way to innovate, to increase trust and security in the financial industry.

Visual of Nadia Filali, Ruben Nieto, Sebastian Markowsky, Sandra Ro and Sebastian Widmann at the 6th EBC

In the panel on digital assets and custody at the 6th European Blockchain Convention, Filali emphasized that crypto is still in a very volatile space and that much is still in experimental stages. Despite that, Filali also acknowledged the potential benefits of crypto, saying that “this may change the current global banking system, especially in areas of securing identity and tokenization of assets.”

“Security and KYC are potential areas of growth for banks, allowing them to offer a range of new services to their customers” – Nadia Filali, Head of Blockchain Programs at Groupe Caisse des Dépôts

Sandra Ro, CEO of Global Blockchain Business Council, agreed, noting that digitization is starting to enter the debt market as well. “I am already seeing projects coming down the line that are digitizing debt, and this is just traditional instruments, and the whole process is being digitized and tokenized.”

“There will be a sharp increase in the digitization of traditional financial instruments in the coming years” – Sandra Ro, CEO at GBBC

Panel Discussion Visual elaborated by EBC team

The potential for niche market investments was also highlighted by panelists, with Filali noting that there are ample opportunities for banks to increase liquidity for investors through tokenizing investments in art and wine.

“As crypto investment interest grows consumers may find themselves returning to banks for assistance with measures such as cold wallets in addition to tokenization and other digital security measures” – Nadia Filali, Head of Blockchain Programs at Groupe Caisse des Dépôts

As banks and other financial institutions are entering crypto markets, security and asset custody remains a central topic of concern. Sebastian Widmann, Head of Strategy at Komainu remarked that while the technology is there and ready, the institutions are not fully prepared for adoption, saying that “it’s not a problem with the technology per se, more of a risk of human error.”

Filali agreed, saying that across France banks are working on digital assets, but the question of consumer security remains an issue. KYC checks may help build security in the long term, but at the moment there is a lack of a consumer appetite for crypto investments with banks, making the progress slow.

KYC will likely mean a new financial landscape for consumers in terms of transparency and privacy. “People confuse blockchain with anonymity” stated Sebastian Markowsky, Chief Strategic Officer at Coinsource.

“In reality, you will be judged by the wallets you will be interacting with”  – Sebastian Markowsky, Chief Strategy Officer at Coinsource

Markowsky is optimistic about the future opportunities that KYC and smart contracts may provide, creating robust security that is more resilient against corruption and theft. As traditional financial institutions continue to adopt cryptocurrencies, measures such as KYC and smart contracts will likely only increase in ubiquity.

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Published December 21,  2021, Barcelona