Banks and other financial institutions are always looking for ways to minimize their risk against other currencies. Or in some cases, they want to hedge against blockchain risk. Elliptic, a well-known bitcoin market analysis company, has unveiled their new tool which should make it more comfortable for banks to work with the bitcoin blockchain.
Elliptic’s New Tool Can Be Beneficial
Although most bitcoin users are not a big fan of blockchain analysis by any means, the technology can have its merits. Elliptic, together with Silvergate Bank, created a new tool to vet businesses over the blockchain. Moreover, this new technology will aid in achieving proper compliance and regulatory requirements. Since banks are uncomfortable about vetting parties over the bitcoin blockchain, a solution had to be found. Whether or not this is the right solution to do so, remains to be seen.
A lot of businesses transacting with bitcoin often find themselves in a pickle when it comes to finding a banking partner. Traditional finance and bitcoin do not mix well together and that situation will not change anytime soon. Elliptic’s new tool may help smoothen the process a bit, even though there is absolutely no guarantee it can make life a bit easier for bitcoin companies.
Handling and assessing the risk associated with bitcoin companies has always been challenging, to say the least. Elliptic aims to make this process smoother and provide in-depth risk profiling at all times. Since banks can no longer afford to openly ignore blockchain and cryptocurrency companies and startups, it will be interesting to see how the situation changes over the coming months. Banks should, in theory, be able to identify suspicious blockchain transactions with Elliptic’s new tool.
It is evident blockchain transactions continue to boggle the minds of financial institutions. This also explains why these institutions do not use open blockchain standards such as bitcoin because the entire concept is far too confusing to them. This results in limited partnership opportunities for bitcoin and blockchain companies. Industry analysts are cautiously optimistic about this new tool, yet its viability remains to be determined.
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