Bitcoin is a digital currency that “uses peer-to-peer technology to operate with no central authority or banks and the creation of cryptocurrency exchanges for purchasing digital assets has caught the eye of millennials all over the world. Without a doubt, the digital asset era has begun.
According to industry observers, Bitcoin and other digital assets seems well positioned to become a viable alternative to banks and may be taking aim at Central Banks, Commercial Banks and others financial institution directly.
Recent reports confirm that the deposit flight to Coinbase and other cryptocurrency exchanges has helped persuade community bankers who were once skeptical of crypto to embrace it. Two small California banks, First Foundation Bank in Irvine and Suncrest Bank in Visalia are (with the help of technology partners) quietly building the capability for customers to buy, sell and hold bitcoin. Account holders would be able to manage and monitor their crypto holdings alongside their checking, savings and other traditional bank products.
Ciaran McMullan, President and CEO of Suncrest Bank in Visalia, California, receives regular inquiries from customers about cryptocurrency. At First Foundation Bank in Irvine, California, Lindsay Lawrence chief operating officer and Kevin Thompson chief financial officer, saw millions of dollars in deposits from Coinbase.
In December, Quontic Bank in New York with assets of $ 1.4 billion, launched a debit card with Bitcoin rewards. Blue Ridge Bankshares, with $ 1.5 billion in assets in Charlottesville, Virginia, let cardholders buy and redeem Bitcoin at 19 ATMs in February. Last month we reported that U.S. Bank will offer cryptocurrency custody and other types of services to its clients. UBS Group AG and Citi Bank are in the early stages of planning to offer wealthy customers digital currency investments. Citi bank is reportedly working on offering their clients “Citi-Coin” a digital asset.
However, most bankers are waiting on a clear path of enforceable regulations, but at this present time there is none. “There is not enough regulatory clarity for many banks to act as custodians, definitely not at the state level,” said Patrick Sells, head of banking solutions at NYDIG. “Obviously the OCC made the decision, but for many states it is not so clear.”
