Bank Of America Predicts The Future Of blockchain

Bank of America (BAC) believes that blockchain technology and tokenization, the process of turning real assets into digital ones, will significantly change both financial and non-financial systems and markets in the next five to ten years.

In a report published on a recent Friday, the bank stated that despite an increase in the value of high-risk assets, digital assets haven't performed as well as the Nasdaq stock index since May. Digital assets have actually fallen behind by 24%, even though they saw a 52% growth from the start of the year. The bank's researchers pointed out that the uncertain regulatory environment, mainly due to actions taken by the U.S. Securities and Exchange Commission (SEC), is causing a drop in cryptocurrency prices and reducing people's trust in digital assets.

Recently, the SEC filed lawsuits against Binance, its founder Changpeng "CZ" Zhao, and the company operating Binance US. The SEC accuses them of breaking federal securities laws. The day after, the SEC filed similar charges against Coinbase, a competitor of Binance.

According to Bank of America, too much focus on regulatory issues, the approval of Bitcoin Exchange-Traded Funds (ETFs) in the U.S., and illegal activities are making people overlook the fast development and widespread use of distributed ledger and blockchain technologies. The bank particularly emphasizes the potential of "private permissioned distributed ledgers and blockchain subnets". These technologies allow the conversion of traditional financial assets into digital form.