Barclays sounding out clients about crypto trading

NEW YORK: Barclays Plc has been gauging clients’ interest in the British bank starting a cryptocurrency trading desk, potentially joining Goldman Sachs Group Inc in pioneering a new business on Wall Street, according to people with knowledge of the matter.

Barclays has so far only done a preliminary assessment of demand and feasibility, said the people, who asked not to be identified because the information isn’t public.

The bank said on Monday it currently has no concrete plans to start such an operation.

“We constantly monitor developments in the digital currency space and will continue to have a dialog with our clients on their needs and intentions in this market,” spokesman Andrew Smith said in an e-mailed statement.

A crypto trading desk would require approval from investment bank boss Tim Throsby, and potentially chief executive officer Jes Staley, given the novelty of the asset class, risk and compliance requirements, according to one of the people. No other big European investment bank is known to be building such a desk.

Staley has made building up Barclays’s investment bank the centrepiece of his strategy to revive earnings. In September, Throsby vowed to reignite the unit’s “commercial zeal” and authorised the transfer of billions of dollars of capital to higher-risk trading activities from vanilla corporate lending.

Bitcoin – infamous for its wild price swings after rising to a peak of more than US$19,000 in December before halving in value within four months – could fit the bill.

Demand for such services is plentiful. Hedge funds that deal with Bitcoin and other virtual currencies have been eager to find banks to handle transactions – much like prime brokers do with securities – and potentially serve as custodians of digital assets.

Some money managers have struggled to expand into crypto, in part because of rules that prevent them from using unregulated exchanges to trade and hold investments.