56% of banks say DLT and crypto are 'not a priority' in near future — Fed survey

9cda0712 60b7 452c aeba 8f6fe28dbc0e

A survey conducted by the Federal Reserve Board of the United States suggested that the majority of officials at major banks did not consider crypto-related products and services a priority in the near future.

According to the results of a Fed survey released on Friday, more than 56% of senior financial officers from 80 banks said distributed ledger technology and crypto products and services were “not a priority” or were “a low priority” for their growth and development strategy for the next two years, while roughly 27% said they were a medium or high priority. However, roughly 40% of respondents in the survey said the technology was a medium or high priority for their banks for the next two to five years.

Results of Fed survey from May 2022. Source: Federal Reserve

Answers from surveyed bank officials were similar to the effects of crypto on liquidity management practices, with many respondents saying the technology would likely be unimportant for both the next two years and two-to-five years down the road. Some of the officials said the banks were “actively monitoring the situation and will adapt to the landscape as needed.”

The senior financial officers surveyed represented banks  held roughly 75% of total banking system reserve balances as of May 2022. Domestic banks comprised 46 of those surveyed, and foreign banking organizations totaled 34.

Related: How does the Fed impact crypto?

As the central bank of the United States, the Federal Reserve will likely be the institution to release a digital dollar if approved by lawmakers or regulators. The Securities and Exchange Commission and the Commodity Futures Trading Commission also oversee many of the regulations covering digital assets and financial institutions in the country.

On Wednesday, the Senate confirmed former Ripple adviser Michael Barr as the Fed’s next vice chair for supervision, ensuring that a full seven members will sit on the board of governors in 2022.