Finance

Boards rush to fill crypto knowledge gap despite crash: ‘Ignore at your peril’

The long-awaited crypto winter may be in full swing, but boardrooms are in back-to-school mode when it comes to cryptocurrencies and other types of digital assets, according to research.

A poll of more than 200 corporate directors has found that while companies still have a considerable knowledge gap, 95% of boards are actively seeking to educate themselves on digital assets. Half of the respondents were from companies with a market cap of more than $2bn, with 60% coming from the US.

More than half of global directors who took part in the survey by compliance firm Diligent said they have enlisted the help of third-party experts or consultants to help them better understand the industry, while many more are looking into it independently.

Despite a capitulation in crypto prices in the past two weeks that has led to thousands of job losses across the sector, some of the world’s biggest financial institutions continue pushing into crypto. Last month Nomura said it would launch a new digital assets subsidiary to provide institutional clients with crypto trading services.

Others have made plays in the digital assets space in recent months too: HSBC took a stake in metaverse gaming firm The Sandbox in March, private equity giant Apollo hired JPMorgan metaverse head Christine Moy in April, and Grayscale said it would launch its first European ETF, the Grayscale Future of Finance UCITS, in May.

The research found that 40% of directors felt the ability to incorporate digital assets into their strategy would be important to their companies’ competitiveness in the future, while more than one-in-five respondents said crypto’s strategic importance had grown in the last six months.

READ Bankers who quit for crypto have no regrets amid meltdown

Fergus Murphy, chief customer experience officer at Virgin Money, who responded to the survey, said: “[Digital assets] are here to stay and must be incorporated or accommodated into core strategy.”

The findings echo statements made by bank chief executives at the World Economic Forum in Switzerland last month. Credit Suisse chair Axel Lehmann warned against getting left behind as digital assets win over more of the financial world.

Meanwhile, Citigroup chief executive Jane Fraser said there had been an “unbundling from what was the old institutions of the world financial order”, towards new firms that are “born digital” thanks to crypto.

And in a May letter to shareholders, even the crypto-sceptic boss of JPMorgan Jamie Dimon said that the broader ecosystem of decentralised finance and blockchain are “real, new technologies that can be deployed in both public and private fashion, permissioned or not”.

Another respondent to the survey, Mukeeta Jhaveri, a non-executive director based in India, was blunt. He wrote of the digital assets sector: “Ignore at your own peril.”

To contact the author of this story with feedback or news, email Alex Daniel

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