Crypto-friendly banks, what they are, the services they offer and some examples
Of CNBCTV18.com IST (published)
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Crypto-friendly banks are nothing more than traditional banks that have started offering certain crypto-related services. In most cases, increased customer demand for crypto services is pushing conventional banks into the digital asset space.
The fiat banking system is known to adapt to changing times – maybe not quickly, but surely. This was seen when credit cards came into the picture and proved to be their ultimate cash cow. Then came internet adoption with online banking, followed by entire banking portals and mobile applications.
And it seems that the next step in their development is the inclusion of cryptocurrency. In this article, we will learn what crypto-friendly banks mean, their services and even a few famous examples of such banks. Let’s get started.
What are crypto-friendly banks?
Crypto-friendly banks are nothing more than traditional banks that have started offering certain crypto-related services. In most cases, increased customer demand for crypto services is pushing conventional banks into the digital asset space. This can be explained by the example of JPMorgan Chase in America, one of the largest banks in the United States, which began to offer services such as crypto security deposits and more due to customer demands.
For banks to include crypto services is a step in the right direction. It would make crypto transactions, holdings and investments a breeze, considering that these services would be available to customers on the same user-friendly dashboards they use for banking. The greatly reduced learning curve will also bring more people to crypto. Crypto-friendly banks are also an indication that the big institutions are coming to terms with crypto as a definite part of humanity’s future.
Crypto Friendly Banks vs Crypto Banks
It is quite easy for anyone to confuse crypto friendly banks with crypto banks. However, they are two very different entities. Crypto-friendly banks are traditional banks that have expanded their scope to include certain crypto services. In contrast, crypto banks are made exclusively for crypto users and offer various crypto services.
A common example of a crypto-friendly bank is Morgan Stanley. The investment banking giant has opened crypto services to clients worth more than $2 million. These elite customers can now buy, store and even give interest or invest in cryptocurrency funds with Morgan Stanley. Other crypto-friendly banks include Goldman Sachs, Bank of New York Mellon, Vast Bank, BankProv, USAA, etc.
On the other hand, a famous example of a crypto bank could be Juno. It is a digital bank that prides itself on being the gateway to the Web3 and crypto world. It is known worldwide for its low transaction fees and high returns, with rates going up to 6 percent on Ethereum and Bitcoin. Other crypto banks include Ally Bank, Nuri, Revolut, etc.
Services offered by crypto-friendly banks:
Custody services – This refers to the storage of tokens and other digital assets. Instead of having a hardware wallet, you can trust your bank to keep your digital assets safe like you do with your fiat currency.
Payment Processing – We already work as a global village where sometimes payments across countries are done via crypto to reduce hassle and increase speed. With your traditional bank offering crypto payment processing, you will have a much easier time delivering work and getting paid. This is also useful for businesses that want to accept crypto payments on their website or mobile application.
Lending and loans – These are the simplest banking services, but when it comes to crypto. Tokens you have can be lent to others for interest through your bank, and you can also use tokens as collateral to borrow a loan. Some banks will also offer crypto debit and credit cards along with a checking account for digital assets.
Conclusion
Just a few years ago, the idea of traditional banks offering crypto services was unheard of. Therefore, with so many of the biggest names in the financial sector rushing to join the digital asset bandwagon, the future of the crypto industry looks promising.
