Bitcoin is taking another step toward mainstream adoption with customers of some U.S. banks soon able to buy, hold and sell bitcoin through their existing accounts. This according to crypto custody firm NYDIG.
A subsidiary of $10 billion New York-based asset manager Stone Ridge, NYDIG has partnered with fintech giant Fidelity National Information Services. Together they have developed a program to enable U.S. banks to offer bitcoin in coming months.
According to Patrick Sells, head of bank solutions at NYDIG, hundreds of banks are already enrolled in the program. While the custodian is in talks with some of the largest U.S. banks, many of the enrolled banks are smaller institutions such as Suncrest, a California-based community bank with seven branches.
“What we’re doing is making it simple for everyday Americans and corporations to be able to buy bitcoin through their existing bank relationships,” Sells said. “If I’m using my mobile application to do all of my banking, now I have the ability to buy, sell and hold bitcoin.”
Traditional finance getting in
So far, Bitcoin trading takes place away from the traditional financial space on apps from a new generation of fintech players. Crypto exchanges such as Binance, FTX, Kraken, Coinbase and companies Robinhood, PayPal and Square have been driving the retail adoption. Banks though, have steered clear of Bitcoin for retail customers. Only until this year when many large U.S. banks realized its clients demand exposure to cryptocurrency. Hence the likes of Goldman Sachs and Morgan Stanley recently announced plans to offer Bitcoin funds to institutional clients.
We need to do this, because we see the data
Yan Zhao, president of NYDIG sees a paradigm shift where banks are now asking for Bitcoin after crypto-exchanges reported massive revenues by taking clients’ dollars away from the banks.’
“This is not just the banks thinking that their clients want bitcoin, they’re saying `We need to do this, because we see the data,’” Zhao said. “They’re seeing deposits going to the Coinbases and Galaxies and Krakens of the world.”
“Most people can’t invest in things that institutional investors get to invest in,” Zhao said. “With Bitcoin available through your bank to be purchased with as little as $1, now you have an attractive asset that’s available to be owned by anyone in any amount. We think that’s huge for economic empowerment.”
After rolling out their Bitcoin product, NYDIG will offer other services such as crypto reward cards and a new type of bank account that is FDIC insured, but pays interest in bitcoin, the NYDIG president said.
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Source: Igaming
