The Rise of a New Crypto Banking System
Global banking is gradually veering towards cryptocurrency. This is in many ways a compelled pivot, given the financial sector's transition from a state of denial and resentment to negotiation, ultimately leading to acceptance. Could this be the heralding of traditional finance's demise?
In our previous article, , we mentioned that government regulators continue to tighten their grip on crypto asset providers and financial institutions that back digital projects. However, banking professionals, by the very nature of their roles, invariably favor opportunities for capital growth over the potential for regulatory backlash.
Even the downfall of American banks like Silicon Valley Bank and Signature hasn't halted the transition of traditional financial entities towards cryptocurrency. Digital ventures seek alternatives, and demand invariably brings about supply – a fundamental market law not even the harshest regulator can alter.
More often than not, these maneuvers are done in the shadows. The government of Hong Kong stands out as a unique exception to this rule. It has taken a proactive stance by urging banks to actively support the cryptocurrency industry, while also offering comprehensive assistance in integrating digital currencies into conventional payment systems.
Here's a partial list of American banks that continue to engage with digital companies, despite considerable pressure:
- Customers Bancorp – A banking conglomerate that has been catering to major crypto investors since 2021. They've established a separate payment platform for institutional clients that facilitates transactions in both dollars and stablecoins.
- Cross River Bank – A New Jersey-based company offering financial services to FinTech initiatives. Its client roster includes big names like Coinbase and Circle. However, they enforce a $1 million cap on each digital transaction, prompting institutional players in the crypto market to seek out more substantial alternatives.
- Axos Financial Inc – This Las Vegas-based bank is currently under the SEC's radar for providing services to Binance US. Besides this crypto heavyweight, Axos also hosts dozens of smaller crypto projects.
- FV Bank International Inc – This Puerto Rican bank provides storage services for digital assets and handles transactions in stablecoins, converting them into US dollars.
- Bank Frick & Co – This American bank, with an office in Liechtenstein, facilitates trading and storage for BTC, ETH, and some stable tokens.
- SEBA Bank AG – An American-Swiss company offering private individuals, businesses, and institutional investors access to digital asset storage and loans. Clients can also obtain a crypto credit card to purchase goods and services using digital currencies. Following the downfall of Signature and Silvergate, SEBA became the go-to for digital projects seeking cryptocurrency storage services.
Indeed, we're observing the genesis of a fresh financial landscape where cryptocurrencies are beginning to claim pivotal roles.
Against this change is the backdrop of lawsuits from the SEC aimed at leading crypto exchanges, their retreat from American markets, the antagonism from the world's primary critic, Gary Gensler, and the prevailing, unprecedented state of FUD engulfing the crypto community.
