Crypto bank is an online platform that conducts traditional banking operations (lending, money preservation and transfers) using cryptocurrency as well as providing financial analytics, planning and advice services for its users.
Customers is offering deposit accounts and on/off ramping to licensed exchanges to allow digital asset and blockchain firms to settle US dollar transactions underlying their crypto assets seven days a week in US dollars.
High interest rates for savers
Crypto banks provide people with an alternative means to deposit cryptocurrency and earn interest, often via checking accounts that store both USD and crypto assets safely together. By keeping assets away from hacks or scammers, these banks offer safer storage solutions than wallets which may be vulnerable to being compromised or lost entirely.
Cryptobanks often provide much higher interest rates to savers than traditional banks, often exceeding inflation levels. Moreover, most cryptobanks are backed by stablecoins for greater security compared to volatile coins.
Due to concerns over crypto banks and industry uncertainty, traditional banks are wary of working with them. This has reduced the number of crypto-friendly banks. Two such institutions were La Jolla-based Silvergate Bank and New York-based Signature, catering specifically to this industry in 2022; both closed suddenly this March due to uncertainty within both industries; prompting crypto companies scrambling for alternatives banking partners.
Easy access to funds
Crypto banks provide clients with various operations and services designed to secure their assets, including custody, brokerage, tokenization, asset-management and lending services. Others provide checking accounts that allow clients to store cryptocurrencies while earning interest – as well as instant transfers unlike traditional banking which takes three to five business days for funds transfer.
Cryptobanks can be an attractive solution for smaller companies seeking access to funds without being tied down by traditional banking structures. Furthermore, cryptocurrencies offer investment opportunities which could prove lucrative if handled appropriately.
Cryptobanks can provide important financial assistance for unbanked and underbanked populations, particularly Black and Latino or Hispanic communities. While reports and surveys tend to lump these groups together, their crypto usage rates and objectives differ significantly – it’s crucial that individuals understand these variations before making the decision whether cryptobanking is right for them.
No distinction between business hours and off-hours
A crypto bank provides digital-asset investors with a range of financial services, from custodianship and lending, to interest income on stored assets as well as connecting to crypto exchanges for trading services.
Crypto markets operate 24/7, making crypto investment much simpler for investors who prefer instantaneous money transfer between digital wallets. When compared with bank wire transfers, which take days.
Since the failure of Silvergate Capital Corp and Signature Bank this month, digital-asset firms were left without 24/7 banking options. But some banks have come forward to fill this void – Customers Inc in particular provides on and off ramping services to regulated digital-asset exchanges and trading firms as well as real time USDC settlement for stablecoin markets – signing on as the default deposit bank for Circle Internet Financial Ltd who issue USD Coin.
Secure transactions
Crypto bank offers secure transactions powered by blockchain technology. A decentralised database, blockchain ensures trust and security by requiring mutual consent before altering data – this reduces fraud while eliminating clearing houses, while speeding up customer review times – essential features in AML/KYC compliance.
Crypto banks also provide various services that assist consumers in managing their digital assets, including wallets – devices that hold cryptocurrency and allow users to conduct transactions – that can either be digital or physical and protected with passwords and login credentials to prevent unauthorised access.
Crypto banks also offer cryptocurrency debit cards that work like prepaid credit cards – making them an easy and safe way to spend cryptocurrency both offline and online. Plus, these cards can even be loaded up with cryptocurrency via exchange platforms!
