Crypto-friendly banks are nothing but traditional banks that have begun to offer certain crypto-related services. In most cases, increased customer demand for crypto services pushes 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 turned out to become their ultimate cash cow. Then came internet adoption with net banking, followed by entire banking portals and mobile applications.
And it seems the next step in their evolution is the inclusion of cryptocurrency. In this article, we 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 but traditional banks that have begun to offer certain crypto-related services. In most cases, increased customer demand for crypto services pushes conventional banks into the digital asset space. This can be explained with the example of JPMorgan Chase in America, one of the biggest banks in the U.S., that began providing services like crypto safety deposits and more due to customer demands.
For banks to include crypto services is a step in the right direction. It would make crypto transacting, holding, and investing a breeze, considering that these services will be available to customers on the same user-friendly dashboards they use for banking. The vastly reduced learning curve would also bring more people to crypto. Crypto-friendly banks are also an indication of the large institutions coming to terms with crypto as a definite part of the future of humanity.
Crypto-friendly banks vs crypto banks
It is pretty 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 entirely 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 customers worth more than $2 million. These elite customers can now buy, store and even yield 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 as the gateway to Web3 and the world of crypto. 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:
Custodian Services – This refers to the storage of tokens and other digital assets. Instead of maintaining a hardware wallet, you can count on your bank to keep your digital assets safe as you do with your fiat currency.
Payments Processing – We already work as a global village where sometimes payments across countries happen via crypto to reduce the hassle and increase the speed. With your traditional bank offering crypto payment processing, you would have a much easier time delivering work and getting paid. This is also useful for businesses looking to accept crypto payments on their website or mobile application.
Lending & Borrowing – These are the simplest of banking services but in terms of crypto. The tokens you hold can be lent to others for an interest rate through your bank, and you can also use your 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.
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 finance sector hurrying to join the digital asset bandwagon, the future of the crypto industry seems promising.