A look at Bitcoin friendly banks
Some of the most vocal critics in the crypto space are key figures at prominent banks around the world. Their derisive claims have made headlines, and most view crypto and banks as arch enemies for one simple reason - crypto is a major threat to banks with respect to their ability to control the financial asset. Ripple aside, banks know that with most cryptocurrencies, they will never be able to dictate rules of governance, control the supply, or effect transfer rules or physical ownership.
That said, some banks have taken a very progressive and exploratory approach to the asset class - realizing it will very likely be a significant financial utility to their customers or in their investment portfolio.
Banks Exploring Crypto and Bitcoin Products
Most banks are waiting for ruling and regulations from the SEC and other regulatory agencies before they move fully into cryptocurrency support, but that isn't stopping these progressive institutions from building infrastructure to support that movement:
- Fidelity: Fidelity has started with an exploratory support of the top 5 cryptocurrencies in the market (by market cap) and is looking to support remaining assets closely.Tom Jessop, the head of Fidelity Digital Assets, a cryptocurrency custodial service provider operated by Fidelity, recently“I think there is demand for the next four or five in rank of market cap order. So we will be looking at that.”
- Goldman Sachs: In an interview with Bloomberg TV in China in late summer, Goldman Sachs CEO David Solomon directly confirmed that the company has been clearing Bitcoin futures contracts since June.
“We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too. Goldman Sachs must evolve its business and adapt to the environment,” Solomon said.
A significant barrier for Goldman is the custodial request - to date they haven't agreed to customers requests to hold their Bitcoin. They are still exploring what that would require from a support standpoint.
- USAA: Earlier this year USAA was making headlines for taking a very hands-on educational approach with their customers, emailing their customers with directions with a phone number to call with questions about cryptocurrencies - how to invest, the risks, and a brief history of crypto. While the communication was heavy handed on warnings, it did send a strong signal of future support with first educating their user base.
- Silvergate (Bank of the West): San Diego-based Silvergate is a 30-year-old community bank with three branches in southern California but serves over 250 international clients in the space and is renown as not only being crypto-supportive as a clearning house for exchanges, but has been investing in both the currencies and startups innovating in the space.
CEO Alan Lane sees the path to innovation but took a more pragmatic approach in his decision to support the emerging financial technology. “I put two and two together and I thought, well it might disrupt banking long-term but in the short-term these companies need banks,” he said. “They’re not doing anything wrong. They’re not doing anything illegal or immoral. If they were we wouldn’t be banking them.”
- Bitwala: While not an established bank, Bitwala is a crypto payments startup that is also a fully licensed bank that provides most of the benefits of a bank for the crypto community. From their site:
"Meet the first account that combines everyday banking features with ones built for the crypto economy. With just a few clicks you can set up direct debits, make international payments and track your expenses over time. "
The service provides support to German based customers right now, and is similar in offering to the U.S. based Circle banking service.
Consumer Rankings of Crypto Friendly Banks
A great resource that was shared on Reddit this year is called Moon Banking, which allows consumers to vote on which banks are most friendly to crypto customers. It also allows you to see a macro view of how supportive a country is based on the crypto support scores of the banks within that country.