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Big Banks are Investing Heavily in Blockchain and Crypto: $364 Billion Investment Firm

Last Updated March 4, 2021 2:30 PM
Joseph Young
Last Updated March 4, 2021 2:30 PM

Steve Chiavarone, a portfolio manager at Federated Investors, a US-based investment firm that oversees $364 billion in customer assets, stated that blockchain technology will drive the fourth industrial revolution, echoing the stance of many large-scale investors and politicians, including Seoul mayor Park Won-soon.

“When you think about it from an enterprise perspective, it has the ability to replace reconciliation, which is expensive and requires back office, time, and paperwork, with more instantaneous verification. What that means is, companies can have more efficient supply chains. They can cut their back and middle office costs and that will allow businesses to flow more efficiently and will allow cost to be cut and that savings to be passed along. We think blockchain will one of five key technologies along with automation, robotics, AI, and the Internet of Things,” said Chiavarone in an interview with CNBC .

Big Banks are in Crypto

Major banks such as JPMorgan, Goldman Sachs, and Bank of America cooperate with large-scale conglomerates and enterprises to provide banking services, loans, and business solutions. Other than that, enterprises also work with third party service providers and spend millions of dollars on a quarterly basis for audits, reconciliation, and manual labor costs to sustain their supply chains and minor operations.

Chiavarone stated that many major banks have started to invest heavily in the blockchain and cryptocurrency sector to facilitate the growing demand from banks for cryptocurrencies and blockchain technology. Initially, bitcoin was the only way to access blockchain technology. Recently, Chiavarone stated that banks have started to explore a wide range of blockchain networks and technologies.

goldman sachs
Goldman Sachs has announced that it will launch a bitcoin trading operation.


“A lot of investors went into bitcoin first because it was the first way to access blockchain. Big banks are investing in this heavily. Bank of America boasted at Davos that they’re investing the most,” he added.

Blockchain startups like Bluzelle have already built trusted blockchain networks for large-scale conglomerates such as HSBC, KPMG, Microsoft, and MUFG, which have also continued to leverage blockchain networks like Ethereum and Ripple through several blockchain consortia.

Chiavarone emphasized that if blockchain startups and networks can succeed in replacing back offices, extensive labor, and eliminate costs involved in running supply chains, blockchain technology could lead the next industrial revolution.

“Any company that runs supply chains can benefit from blockchain technology and it is some of the tech names that underlie that kind of technology. Whether it be Nvidia or Intel, or any kind of company that’s around processing power that enables blockchain verification or the beneficiaries of it [are good investments],” said Chiavarone, noting that merely investing in companies that may benefit from blockchain technology is a smart investment strategy.

Cryptocurrency Startups

Some of the world’s largest investment firms like Federated Investors are exploring the stocks of conglomerates like Intel and Nvidia that could merely benefit from blockchain technology. The sole beneficiaries of the growth of the blockchain sector including cryptocurrency businesses, blockchain startups, and blockchain networks will likely experience an exponential increase in value, as banks like Bank of America continue to drive investments into the space.

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