Crypto Trading Will Soon Reach 24M Clients via 650 U.S. Banks
The enterprise cloud-based payments platform NCR has struck a deal with the digital asset management firm NYDIG to expedite crypto exposure to 24 million clients of 650 US banks. Courtesy of this deal, numerous community banks and credit unions will soon be able to allow their clients to buy and spend Bitcoin and other cryptocurrencies through mobile applications built by the payments provider.
This bold move is poised to serve the crypto industry in various aspects. First, cryptocurrencies will reach the next level of accessibility for a large swarm of US investors, expediting the adoption of the emerging market. Next, cryptocurrencies will earn some degree of legitimacy, further incentivizing the mainstream public to embrace them.
650 U.S. Banks to Offer Crypto Exposure
Lately, banks have been losing a considerable sum of their assets to third-party cryptocurrency exchanges — which was magnified by the fear of inflation-induced by stimulus packages. This prompted several banks to consider offering Bitcoin exposure, though the burdensome regulatory requirements have always been a major obstacle.
However, thanks to the collaboration between NYDIG and NCR, now 650 U.S. banks can rely on NYDIG’s custody services and allow their customers to buy and spend crypto. Consequently, this could reduce the need for cryptocurrency exchanges, or in other words, this will put institutions in direct competition with crypto exchanges.
Douglas Brown, president of digital banking at NCR, stated:
“We’re firm believers in the benefits of crypto and the strategic application. And that’s true for our banking relationships, as evidenced by NYDIG, and across retailers as well as restaurants and the like.”
As of now, NCR’s banking clients can purchase, sell, and exchange Bitcoin and other cryptocurrencies from their mobile application. The process is supposed to be so seamless that users might assume they are working directly with their bank. However, NYDIG will be the key component as it offers custody services.
In return for its custodial services, NYDIG will receive a per-user per-month fee from the banks. Banks, on the other hand, will charge transaction fees and generate revenue. However, NYDIG’s head of bank solutions claims the fees might actually be cheaper compared to the current marketplace. He asserted:
“I think you’ll see cheaper transaction fees through the banks than what you have today in the marketplace. But the banks do get to determine what they want that transaction fee to be.”
Moreover, NCR president Douglas Brown asserts that the banks are not likely to limit their profits solely to transaction fees. He concludes that the volatile crypto market will get customers to engage with their banking app more frequently, enabling banks to exploit this surge in visits and promote other products, too.
In addition, Brown hopes that NCR might soon custody its own assets. The payments firm is also exploring other applications of blockchain technology that might assist in executing complicated transactions across many counterparties. “We have broader ambition to do a multitude of things with crypto that will extend into our multi-vertical markets, retailers and restaurants. And then other capabilities oriented around digital banking,” Brown said.
Bullish For the Crypto Market
Banks are the core of our contemporary financial system, and they can play a vital role in the prosperity of the crypto industry. Likewise, a clampdown by banks can result in unfortunate consequences — as had happened when major US banks proceeded to ban users from buying Bitcoin back in 2018.
As per the fact that banks are now embracing cryptocurrencies, we can expect the digital asset industry to expedite its maturation process and grow at a faster pace. For one, these banks will enable 24 million users to seamlessly dabble into crypto, instead of the conventional, time-consuming method of registering and gaining regulatory approval as a crypto exchange.
Moreover, US banks are often acknowledged as lead models for banks from all over the world. Thus, we might soon witness other banks following suit and embracing such assets.
What do you think this will mean for crypto exchanges? Will crypto exchanges lose a significant portion of their clients? Let us know in the comments below.