Win five years, a generation of banking customers won’t do business with a traditional fiat bank unless it offers access to cryptocurrency.
Within a few years, a younger generation of financial services customers are going to be able to walk into a bank and gain access to credit products, savings accounts and investments that can host both crypto and fiat assets. In fact, the inroads that will allow for all of this to happen are already breaking ground.
You probably already know that Kraken, a cryptocurrency exchange based out of San Francisco, is now the first-ever cryptocurrency business in the United States to become a bank. For now, being an officially chartered bank means that Kraken will be able to offer more banking and funding options to existing customers. It also means Kraken Financial is going to be able to operate in multiple jurisdictions without having to deal with state-by-state compliance plans.
Kraken is currently working with Silvergate Bank to offer SWIFT and FedWire funding options to U.S. customers. More and more of these kinds of partnerships will become the status quo in the near future. That’s why now is the time for traditional banks that are lagging behind to start paying attention.
Silvergate Bank is a step ahead of the rest at the moment. The company boasts 880 digital asset companies as clients. Those clients have deposited more than $1.5 billion with the bank. That’s still a small amount of money relative to the market capitalizations of most major banks or even most major cryptocurrencies for that matter. That said, keep in mind that major crypto exchanges Coinbase and Gemini are now customers of JPMorgan, even though CEO Jamie Dimon routinely denounced the value of Bitcoin (BTC) and cryptocurrencies just a few short years ago.
Consumers will soon define a “full service” bank as one that offers financial services in both crypto and fiat. The time to start acquiring the necessary tools of the crypto banking trade is right now. Banks need to start adapting or get left behind. Make no mistake about it.
Any bank still approaching cryptocurrency with trepidation over the next 18 months is at risk of finding itself dead in the water at the hands of Kraken and other banks that jump on board and take the plunge.
Now is the time for traditional fiat banks to engage in empowering the individual with greater access to crypto. If they don’t, they will be swept away by the rising tide of cryptocurrencies ripe to reinvent the world’s financial system one way or another.