Many banks are likely to approach Tether cautiously, and accepting Tether as a client may violate a bank's compliance procedures such as rules meant to prevent money laundering.
Many banks in South Korea along with 61 banks in Japan have already started to trial Ripple payments, with an intent to use Ripple commercially within this year.
Indeed, many banks have imposed a variety of sanctions and restrictions, making it nearly impossible for cryptocurrency traders to deposit funds into their crypto trading accounts on the various exchanges.
Many banks had previously joined a consortium called R3 CEV to explore ways to speed financial transactions using blockchain, but that group has lost members and last year formally joined Hyperledger.
To comply with the more stringent regulatory requirements andabsorb the higher capital costs for credit risk, many banks are overhauling their approaches to credit risk.
Of the twenty banks,more than half have received injections of capital from their government. Many banks have also faced liquidity difficulties, as raising funds in money markets became restricted reflecting the sharp drop in market liquidity.
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