Hundreds of U.S. Banks Will Allow Customers to Store and Trade Bitcoin

  • Crypto Guru
    May 11, 2021, 17:47

Fidelity National Information Services (FIS) partnered with NYDIG to enable hundreds of small US banks to get started with cryptocurrency in 2021. Patrick Sells, Head of Banking Solutions at NYDIG, mentioned that hundreds of smaller-scale banking institutions, such as Suncrest, have already enrolled in the program. He also claims that this initiative will make it easier for US citizens and corporations to access the world’s most renowned cryptocurrency.

Nowadays, cryptocurrency exchanges such as Coinbase, as well as popular payment apps like PayPal and Square, remain the main channels for cryptocurrency users. However, things are about to take a major turn. One reason for such changes is that many banks see their clients transferring their money to crypto exchanges and have become interested in harnessing the potential that lies within BTC.

According to NYDIG President Yang Zhao, US banks want to get involved in the cryptocurrency market. NYDIG has also conducted a Banking + Bitcoin survey in January 2021 that proves that crypto users are equally as interested. For instance, the survey demonstrates that over 46M Americans own Bitcoin. That accounts for more than 22% of adults over 18. Notably, over 80% of the survey respondents claimed that they would move their BTC from a secure crypto wallet to a bank if it offered a reliable cryptocurrency storage option.

Bitcoin Future in the Banking Industry

Banking institutions are helping to propel crypto usage into a wider audience. But what will it mean for BTC owners?

FIS plans to handle the networking with the lenders, being a vendor to banks with about 300 million checking accounts. NYDIG will be in charge of BTC custody and trade execution.

BTCs purchased through banks will not be covered by FDIC guarantees. Banks will be able to set the amount of commission for crypto transactions themselves. In the future, NYDIG will open additional services, such as cards with cashback in cryptocurrency, as well as new types of cryptocurrency accounts.

According to the aforementioned NYDIG survey, more people would want to own Bitcoin and other currencies based on blockchain technology if they were manageable from a regular bank account. This would allow bank clients to have access to all their financial assets in one place without having to commit to third-party services. This new approach is also likely to ensure crypto storing and trading is more immune to scammers.

Yang Zhao mentioned that most people don’t have an opportunity to invest in the same assets as institutional investors do. However, with BTC being available for purchase from a bank account with balances as little as $1, users will have an attractive investment channel a few clicks away. According to Zhao, this will foster economic empowerment.

Banking institutions will generate fee income during a new bull cycle as they join the crypto trend. However, it is not yet clear if they will stay on board if things get worse in the digital assets industry. It is also not confirmed whether smaller banks will follow suit and welcome Bitcoin.