In what could be a first for any regulated financial institution, let alone one with a multinational presence, South Africa’s Standard Bank is reportedly piloting Bitcoin integration internally.
The revelation initially took the form of a leak tweeted from the Finovate Europe exhibition currently going on in London. According to Finovate’s website, the event is a “two-day showcase of cutting-edge financial and banking technology innovations from leading established companies and hot young startups.”
Powering the integration is Switchless, a Bitcoin software company stating a focus on brokerages and wealth management, but more notably, with “global banks”- the very institution type it’s currently piloting. It’s website title even states “Switchless- Secure Bitcoin Systems for Financial Institutions”. It derives its name from its aim to provide “switchless” or decentralized cryptocurrency exchanges. It is a division of FireID, who develops mobile and e-commerce solutions.
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Switchless has said that the pilot has gone well thus far. All that’s reportedly needed for full deployment is regulatory approval, which is hoped for within the next few months.
There is speculation that existing bitcoin exchanges face a huge threat should such an initiative come to fruition, considering that similar services will be ostensibly offered by a regulated body. This would be especially true when considering the recent calamities to have recently befallen several major exchanges.
In reality, the regulatory blessing does not enhance an exchange’s technology or necessarily improve its security. Existing exchanges, as imperfect as they may be, possess the advantage of years of growth and experience in building upon their knowledge bases of this not-so-straightforward technology.
Previously, we wrote about the significance, or lack thereof, when a particular broker or exchange happens to be already generally regulated and is still able to introduce crypto trading. Here, the bank is apparently aiming for regulatory approval specific to its crypto trading. Even if true, it’s still of limited significance until governments grant recognition to cryptocurrency on a similar scale.
In any event, this development should serve as extra encouragement to crypto fans in South Africa, who also recently received their first exchange dealing Bitcoin with their Rand.