Crypto Banking: New Players Step Up As Traditional Banks Step Back
Allgemein• Traditional banks are becoming more cautious about servicing the cryptocurrency industry, prompting smaller regional banks and alternative payment service providers to fill the gap.
• US customers Bancorp, Cross River Bank, Western Alliance Bancorp, and Axos Financial have all provided banking services to some crypto companies.
• In Asia, Standard Chartered and DBS Group offer deposit accounts for digital asset and blockchain firms while ZA Bank offers token-to-fiat currency conversions in Hong Kong.
Traditional Banks Step Back From Crypto Banking
As traditional banks become more cautious about providing services to the cryptocurrency industry, smaller regional banks and alternative payment service providers are stepping up to fill the gap. The collapse of some crypto-friendly banks has led to increased scrutiny of those providing services to crypto companies, prompting a scramble among these companies to find banking alternatives.
US Banks Providing Services To Crypto Companies
In the US, Customers Bancorp is a popular choice amongst cryptocurrency companies due to its real-time payment platform that supports the settlement of US dollar transfers underlying cryptocurrency transactions. Other US lenders that have provided banking services include Cross River Bank, Western Alliance Bancorp, and Axos Financial.
Crypto-Friendly Banks in Other Jurisdictions
In Asia, Standard Chartered provides banking services to a select group of digital asset service providers in Singapore, Hong Kong, and the UAE while DBS Group also offers deposit accounts for regulated digital asset and blockchain firms. Meanwhile in Hong Kong ZA Bank plans to offer token-to-fiat currency conversions over licensed exchanges as well as provide account services for digital sector companies. In Europe Liechtenstein’s Bank Frick & Co also offers banking services as do French lender BPCE SA’s Natixis unit and Banque Privee Edmond de Rothschild Europe SA in Switzerland.
Increased Scrutiny Creates Fragmented Banking Landscape
The increased scrutiny on banks providing services to crypto companies has created a more fragmented global banking landscape with multiple players offering different solutions for cryptocurrency firms looking for financial institutions willing to work with them. This could be beneficial should any of these banks stop servicing crypto companies since there will be other options available already established in their place.
Conclusion
The collapse of Silvergate Bank and Signature Bank has caused an increase in scrutiny on those providing banking services to crypto companies leading them searching for alternative solutions from smaller regional players or alternative payment service providers who are stepping up fill this gap in crypto banking creating a more resilient system where should one bank stop serving this sector others are already established ready take their place