Digital assets: Industry expert: How banks could enter the NFT market | news

• Skepticism about the digital market – NFT just a trend?
• Losing contact or gaining new, young customers?
• music of the future? Banks in Metaverset

In the past year, the NFT market has experienced a real boom, with top prices paid for digital works of art. Trading volume in the first quarter of 2022 was $ 16 billion, according to NonFugible figures. This corresponds to an increase of over 700 percent compared to the same quarter last year and 13.25 percent compared to the fourth quarter of 2021.

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Again and again there are examples of celebrities whose own NFT collections are so hyped that they are sold out within a few hours at terrible prices. Most recently, Anthony Hopkins also searched for recommendations for NFT projects from prominent NFT enthusiasts via Twitter.

Banks and NFTs

Although the banking and finance industry has so far been quite skeptical of the NFT market, there are some areas of application for the finance industry. Financial expert Bernd Oppold, partner at KPMG Financial Services, is even of the opinion that banks should not make the same mistake here as in the area of ​​digital payment transactions, as providers such as PayPal or Klarna referred the banks to their place.

It is now time for banks to address the problem and possibly develop strategies for this still young market. In his article on geldinstitute.de, Bernd Oppold mentions the online broker Trade Republic, which has already won over two million customers with shares in connection with NFT projects, as an example of how the market can pay off. This made it possible for the company to acquire especially young customers, of whom only a few had previously invested in shares.

For the banks, Oppold sees a leading role in the NFT market. In the previously decentralized market via platforms such as OpenSea, banks could offer customers storage space via multi-signature wallets. These would be comparable to a stock account, protected from unauthorized access and would have more benefits for customers: “You no longer have to search the depths of the internet for wallet providers, you just have to knock on the door of your adviser. And you no longer have to mix “in complicated processes that they may not have understood down to the smallest detail. Here, a bank or a financial service provider can provide security,” says the banking expert.

As the digital asset market for established players is filled with a great many unknowns, many banks are still struggling in this young, unregulated market. But especially established financial institutions could find their role in classifying tokens and making the processes transparent. Banks could offer their customers specific projects in digital art, music or sporting events and thus drive both the market and their own business forward.

Banks in Metaverset

The next big step for established financial institutions would be the meta-reverse: banking in a whole new ecosystem. Some so-called neobanks already offer their services on Web3. These direct banks run their business exclusively online, for example through an app, and do not have a branch network.

South Korean banks, already present on some platforms, were pioneers in going into the meta-verse. The most internationally renowned bank with a branch in Metaverse is JPMorgan. The US major bank has acquired a piece of land in “Decentraland” for its Web3 project and this year opened a virtual bank branch, “Onyx Lounge”, where customers will in future be advised online.

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