Crypto Banks: A Complete Guide

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Crypto banking is a newer concept for both the larger banking networks as well as Wall Street. Between investing in cryptocurrency and traditional banking methods, there is a point of convergence where banking services are made available to exchange and interact with both fiat currency and cryptocurrencies. Enter: Crypto banking.

What Is Crypto Banking?

Crypto banking simply refers to the managing of digital currency at any financial service or banking provider. Since anyone with an internet connection can buy, sell and trade cryptocurrencies, it is becoming more and more popular. 

Crypto banks operate in a similar way to traditional financial companies. In addition to holding stocks and cash for investors and customers, crypto banks hold digital assets as well. Here are some key takeaways.

• Crypto interest accounts: A crypto interest account is essentially a crypto business version of a savings account. This type of account allows you to earn interest at a much higher rate than on a traditional savings account.
• Crypto checking accounts: Most crypto checking accounts have no monthly fees, so you can hold on to more of your money.
• Cryptocurrency is not FDIC insured: Crypto is not protected by the Federal Deposit Insurance Corp. If the company you bought your crypto from goes under, you could lose your investment. One day things might change but until then it’s important to do your due diligence when choosing reputable crypto banks to work with.
• Crypto market volatility: Crypto assets are notoriously volatile. Investing in crypto comes with an increased amount of risk compared to other trade markets. Even when crypto is stable, crypto market fluctuations or money laundering can happen in the blink of an eye.

8 Crypto-Friendly Banks

In finance, there will always be a certain amount of risk implied. However, crypto banking merged with blockchain technology presents the possibility of a future based on transparency. Here are some banks that have started investing in the crypto journey: 

1. Ally: You can’t actively trade cryptocurrency through this popular online bank, but you can directly invest in crypto. This can be done through the app by putting money into bitcoin futures or other crypto stocks. 
2. Binance: This cryptocurrency exchange offers classic banking services like credit cards, fixed deposits and even loans. 
3. Coinbase: This platform is great for crypto beginners. In addition to giving you access to the crypto exchange market, you can get rewarded for improving your crypto knowledge and trading ability.
4. Goldman Sachs: This recognizable institution offers crypto trading services such as bitcoin options and futures. 
5. JPMorgan Chase: Though you cannot trade crypto directly through the app, JPMorgan Chase does allow you to trade stocks invested in blockchain or other crypto securities. 
6. Juno: Juno recently merged banking and crypto. Users can now buy and sell cryptocurrencies through their checking accounts with no fees. 
7. Revolut: Revolut is one of the newer entries in the fintech game. It has innovative banking services that allow you to purchase bitcoin directly through the app or set auto-exchanges for when the rate reaches a specific price. 
8. Wirex: Based in the United Kingdom, Wirex offers a variety of plans and the ability to store and manage your cryptocurrency. It also has both multi-currency exchanges and near-instant exchanges.

Fintechs and Banks Innovating Together

A collaboration between banks and fintech is necessary if banks expect to remain relevant and competitive in the future of digital currencies.

Currently, major banks like Chase are discussing the possibility of classifying bitcoin as a legitimate asset class. Other banks could benefit from increased traffic and profitability as more investors begin taking advantage of the crypto space.

Blockchain Adoption in Banking

There are many uses in banking for blockchain technology. It’s only a matter of time before banks start to take advantage of the public ledger in certain areas. For example, trade finance often involves collaboration on transactions. Blockchain implementation can reduce fraud and increase transparency across several types of transactions.

Final Take To GO

Crypto banking is continuing to disrupt the financial sector. As such, there are several risks associated with investing in rising cryptos and using apps built for trading and holding digital assets. If traditional banks catch on to consumers’ desires for more crypto capabilities in banking, you can expect to see some radical changes to the financial sector in the coming years.

More and more, crypto banks and traditional banks are merging in the services they provide. Make sure to check if your current bank has crypto trading or investing as you begin to explore your options. 

Kiara Taylor contributed to the reporting for this article.

Information is accurate as of June 16, 2023. 

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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