Have the banks kissed the frog?
The Carabinieri (Italy’s military police) and the Bank of Italy are said to be the only institutions still holding up in this country. To these we can add the San Paolo. Yes, because for the people of Turin, the Bank (with a capital B) is still the San Paolo. The merger with Intesa hasn’t touched them in the slightest. My grandmother would almost stand up when its name was mentioned, and she regarded her savings invested in the San Paolo land credit 4% bonds as kept somewhere between Fort Knox and the Vatican Secret Archives.
Why are we telling you all this?
Because news broke a few days ago that the San Paolo, allow us to keep calling it that, Italy’s (and Europe’s) largest bank by market capitalization (out of innate Savoyard modesty we’ll leave the American and Chinese ones out of the comparison), has also become the first Italian bank to invest in Bitcoin. Mind you, the 11 (eleven) Bitcoins it bought, worth not even a million euros, wouldn’t even be newsworthy, so far are they below the rounding threshold, were it not for the fact that they’re Bitcoins. Never before had Italian banks kissed the frog. A sort of disclaimer by Intesa Sanpaolo’s CEO (here we have to use its proper name), C. Messina, has also been published, which reads almost like an excusatio, in which he states that cryptocurrencies are risky assets for professional investors, etc. etc., and that he himself doesn’t invest in them … yes, yes, but as they say, motives fade, facts remain. That is, the 11 Bitcoins bought by Europe’s leading bank remain.
In the same days, another piece of news, this time published in the Financial Times, matched the home-grown one on a global scale. It’s an analysis of the (re)positioning of North American pension funds on cryptocurrencies. And what could be more naturally conservative and institutional than a pension fund, on which the well-being of so many elderly people depends? If they’re moving, it means the wind really has changed and is no longer blowing against. The point is clearly summed up by one of the interviewees: in general we think that, although cryptocurrencies are risky, new and not yet fully proven, they have become too big, and their potential too great, to keep ignoring them.
What might this mean? That traditional finance, having ignored them, or rather more than ignored, opposed them, is taking a less hostile attitude. Of course, the Trump-Musk duo, as we said a few weeks ago, is doing its bit, and, believe me, that’s no small weight. And the exit of the Great Adversary, Gary Gensler, the rubber wall (see post of 11/29/24), as head of the SEC (the US markets watchdog) removes a really tough opponent. We’ll see about the next one, but the fact that he’s appointed by the Duo should hold few surprises as far as inclination and willingness are concerned.
Of course, what we said a few months ago about traditional finance’s (deadly?) embrace of Bitcoin and the crypto world in general still applies. Systemic banks and pension funds investing in Bitcoin (or other cryptos) are the antithesis of the original thinking of Satoshi Nakamoto, if he ever really existed: to make available a democratic means of payment that could escape the yoke of the traditional banking networks. And here, not only would it not be a mainstream means of payment (and, as we’ve said many times, at least slow and cumbersome Bitcoin can’t become one), but rather a static store of value, it would also be adopted by that very same detested traditional finance that people so wanted to leave out.
