Bitcoin is coming to hundreds of US banks, says crypto firm NYDIG

The price of the Bitcoin virtual cryptocurrency is shown in this photo on a phone screen.

STR | NurPhoto | Getty Images

Bitcoin may take another step towards mainstream adoption, according to CNBC.

According to the crypto custodian NYDIG, customers of some US banks will soon be able to buy, hold and sell Bitcoin using their existing accounts for the first time.

The company, a $ 10 billion subsidiary of New York-based asset manager Stone Ridge, has partnered with fintech giant Fidelity National Information Services to offer US banks over the coming months, according to the two companies to enable Bitcoin.

According to Patrick Sells, Head of Bank Solutions at NYDIG, hundreds of banks have already joined the program. While the company is in discussion with some of the largest US banks, many of the lenders who have agreed to participate are smaller institutions like Suncrest, a California-based community bank with seven branches.

“We’re making it easy for everyday Americans and businesses to buy Bitcoin through their existing banking relationships,” Sells said. “If I use my mobile application for all of my banking, I can now buy, sell and hold Bitcoin.”

So far, Bitcoin users have relied on apps from a new generation of fintech players such as Robinhood, the payment giants PayPal and Square, or cryptocentric companies such as Coinbase. Banks, on the other hand, have stayed away from Bitcoin for private customers and only recently announced plans to allow wealthy wealth management customers to bet on the cryptocurrency.

According to Yan Zhao, president of NYDIG, banks are now asking about Bitcoin because they can see their customers sending dollars to Coinbase, Kraken, and other crypto exchanges.

“These are not just the banks who think their customers want Bitcoin, they are saying,” We have to do this because we see the data, “Zhao said.” They see debris in the coin bases and galaxies and octopuses of the world. “

Peer pressure

According to Rob Lee, head of digital banking at Fidelity National Information, giants like JPMorgan Chase and Bank of America could come under pressure to offer crypto to their retail customers.

In March, Morgan Stanley became the first among banks to offer Bitcoin funds to its customers, CNBC reported last month. Goldman Sachs quickly followed suit with its own announcement, and JPMorgan is reportedly reviewing its own product in partnership with NYDIG.

But in these cases, banks have sent tens of millions of dollars of Bitcoin to wealthy individuals and family offices.

“Most people cannot invest in things that institutional investors can invest in,” Zhao said. “With Bitcoin, available through your bank and purchased for as little as $ 1, you now have an attractive asset that you can own in any amount. We think this is huge for economic empowerment.”

Yan Zhao of the Crypto Custody Company NYDIG

Source: NYDIG

While Fidelity National Information, a provider of banks with nearly 300 million checking accounts, takes care of the connection to lenders, NYDIG takes care of the custody of Bitcoin and the trade processing. Disclosures will make it clear that NYDIG, not the banks, handle the bitcoin and the cryptocurrency is not FDIC insured, according to Zhao.

Fidelity National Information, based in Jacksonville, Florida, is aimed at banks and offers access to services such as chatbots or Apple Pay. It’s also a heavyweight in the payments industry, purchasing the Worldpay processor two years ago for $ 35 billion in the industry’s largest acquisition to date.

Banks will determine how much to charge their customers for Bitcoin trades and, according to Sells, will withhold most of that fee income. After launching the first bitcoin product, NYDIG plans to add more services, including debit card rewards paid with bitcoin and a new type of bank account that is FDIC insured but pays interest on bitcoin, he said.

According to a survey commissioned by NYDIG, more people would own Bitcoin if they could do so through their existing banks. This gives them a unified view of their financial assets and avoids the need to log into another institution and fund the account with a money transfer, which typically takes three to five business days.

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