Blockchain technology has taken the banking system by storm especially in the introduction of crypto banks. To most of us, cryptocurrencies are to replace the banks, but the event’s recent turn says quite the opposite. Integrating the blockchain into the banking space has seen the rise of crypto banks. It has also facilitated the improvement of the traditional banking system. The realization crypto revolution has dawned on many who now see traditional systems favor mostly governments and banks. In a recent interview, broadcaster Max Keiser explained:
“Unless you’re a country that can make money by debasing your currency, by getting kickbacks from Wall Street who packages all those currencies in the form of negative rate interest-rate bonds, then you only have one choice.” He added, “You can only try to win the hand with the high hand: gold, silver, and Bitcoin. Where do you see crypto banks in the coming years?
Does DeFi Answer It All?
Decentralized Finance or DeFi has done an outstanding job of improving Fintech. The big question remains, will these protocols answer to the needs of an average man? Defi enables you to take investment opportunities for taking liquidity pools to borrow. It also enables the lending of crypto assets by a simple click of a button. The protocols allow users to capital on digital asset investments without the costly mutual funds’ fee. But you need to have the knowledge to enjoy all these.
For the local man who may wish to add crypto to his portfolio, interacting with the banker now is still the most convenient way of doing things. In the coming years, the right bank will be defined by whether the bank offers both crypto and fiat services. There is a lot of pressure on pushing towards central bank-backed digital currencies. Even governments worldwide are now pushing for that. All said any bank that will not look at providing cryptocurrency services might find themselves in dead waters. And at the mercy of crypto banks like Kraken.
How Is the US First Crypto Bank Faring?
Kraken hit the headlines last month. This is after the San Francisco banking authorities chartered the cryptocurrency exchange. Thanks to this historic announcement, the firm can now provide banking and funding options to its customers. This also allows the firm to expand to other jurisdictions both in the US and beyond.
The exchange has signed partnership deals to ensure the smooth flow of things. To offer SWIFT and FedWire funding, Kraken is in a deal with the Silvergate Bank. The firm is looking forward to more and more of these kinds of partnership deals. Silvergate has over 800 of cryptocurrency-related clients with over $1.5 billion in investments.
Kraken is not the only crypto firm to enter agreements with banks. Crypto giants like Gemini and Coinbase are in business deals with JP Morgan. This is despite the bank’s reckless comment on BTC a few years ago.
Other Player In Crypto Banking
Other than Kraken, several firms want to deepen their hand into the banking cookie jar. These online platforms allow you to borrow and lend your cryptocurrencies with zero paperwork. Here are some firms providing crypto banking services;
Nexo–allows you to use crypto as collateral in borrowing cash or stable coins as you earn interest holding your crypto on the platform.
Woorton- provides liquidity to cryptocurrency buyers and sellers. The platform facilitates crypto-fiat pairing to traders and institutional investors.
ZooZbit- the Israeli holding firm offers several financial and banking services to crypto owners.
There is a lot of pressure for banks to adopt blockchain technology and start offering crypto products. But banks must go back to the drawing board to remain relevant. The banks can also use smart contracts to diversify their service. Banks have not been transparent over a long period now. Anyone who will not give credence to the blockchain’s reality will lose customers to crypto banks.