American Banker to Debut Bitcoin Buying and Selling on Mobile Banking

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Key Takeaways:

  • American banker to debut bitcoin buying and selling on mobile banking.
  • An estimated 300 banks will debut in the first or second quarter with the support of fintech firm NYDIG, allowing users to buy and trade bitcoin through their mobile banking app.
  • As part of the endeavor, the banks, the American Bankers Association, and the Independent Community Bankers of America have invested in the company.

According to crypto custody business NYDIG, users of some U.S. banks will soon be able to buy, hold, and trade bitcoin using their existing accounts for the first time.

With the support of the fintech NYDIG, an estimated 300 banks, some of which announced their plans in June, would launch this service in the first or second quarter. In the months after the initial announcement, several regulatory and security concerns have been addressed, and partnerships and integrations between NYDIG and the banks’ existing technology providers have been established, according to participants.

Customers will be able to purchase and trade bitcoin via mobile banking apps, according to a group of community banks that set a high-tech objective last year.

According to banking and trade organization leaders, the program meets a clear demand voiced by clients.

“We’ve seen a lot of activity in cryptocurrency transactions from our customer accounts, and a few of the investments have been quite large,” said Harold Reynolds, CEO of the $1.3 billion-asset BankSouth in Greensboro, Georgia, which is one of the banks aiming to launch bitcoin trading in its mobile app by midyear.

Digital assets, in general, are becoming increasingly significant to banks, according to Zack Bishop, executive vice president of technology, operations, and security at Synovus, a $56 billion asset firm. He pointed out that banks now lend based on physical assets such as vehicles, farm equipment, and commercial real estate. The banking industry will follow as the push toward digitizing assets and putting them on public blockchains with provable records of ownership and value, as well as blockchain-based security, continues.

Bitcoin trading, in addition to retaining consumers, may generate revenue growth and keep banks competitive, according to industry officials.

The first bank to break the mould is not the NYDIG client. In October, Vast Bank in Tulsa, Oklahoma, teamed with Coinbase to make cryptocurrency purchases possible through its checking accounts. It now accepts 12 different cryptocurrencies.

Though the bank is building a network of providers, NYDIG is the bank’s first sub-custodian agreement. NYDIG topped the list, according to the release, because of its experience managing compliance and regulatory requirements in the industry.

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Chetna Prakash