Banking on Bitcoin: Crypto Banks Are Coming for Fintech

Friday 22 January 2021, 2:40 AM AEST - 1 month ago

  • In 2021, banks now own crypto, and crypto has its own banks.
  • Switzerland and Gibraltar have launched crypto banks, and last week the US issued Anchorage with the first federal charter.
  • Traditional banks are also moving into cryptocurrencies and a new, hybrid landscape is emerging.

If you take a walk in Gibraltars main square, past the city vault and the smart—but still shuttered—premises of the territorys newest bank, you wont notice anything remarkable.

Yet the building, a former crystal factory, is now the home of Xapo Bank Gibraltar Ltd, Europes first physical cryptocurrency bank, and one of the forerunners of a quiet revolution in banking.

That regulators in Gibraltar and Switzerland are licensing crypto firms as fully-fledged banks, authorized to custody funds, trade, and lend on behalf of their clients, may not be so surprising. But, last week, the US banking regulator, the Office of the Comptroller of the Currency (OCC), joined the fray and cleared Visa-backed digital asset platform Anchorage as the first federally chartered crypto bank—paving the way for the integration of crypto assets into the mainstream economy.

The action signals a new legitimacy for cryptocurrency and accompanies growing pressure on mainstream banks, whose institutional clients are hungry to safely access the trillion-dollar crypto market. The OCC has even provided explicit reassurance that banks can hold cryptocurrencies—a service many have been none too keen to perform.

As the new crypto banks prepare to build out a brave, new banking landscape, Decrypt spoke to Anchorage, crypto exchange Kraken, and others embarking on this venture.

The first federally chartered crypto bank

The federal trust charter Anchorage has received covers all the services it currently offers to its institutional clients: custody, training, financing, lending, borrowing, and governance of crypto assets.

But it also gives the firm the flexibility to operate under just one regula ...

Read full story on Decrypt

Disclaimer: The content and views expressed in the articles are those of the original authors own and are not necessarily the views of Crypto News. We do actively check all our content for accuracy to help protect our readers. This article content and links to external third-parties is included for information and entertainment purposes. It is not financial advice. Please do your own research before participating.