Even after being famous, cryptocurrencies are still deemed as high risks. These trade or exchanges are not even considered for banking or even obtaining solutions in a typical fashion. Most business owners running crypto exchanges and trading platforms are even denied bank or merchant accounts even if they are licensed. Accepting fiat or cryptocurrencies as an online retailer, for example, could be super challenging. And if you have not noticed, banks don’t really like cryptos. Thus, if you are curious as to what is a crypto merchant bank, read on.
The Difference Between Commercial And Merchant Banks
Before we learn stuff on what is a crypto merchant bank, let’s check out some definitions first.
Banks are financial organizations that serve as intermediaries between the depositors and borrowers.
Aside from its usual function of accepting deposits and increasing credits, most value-added banks also render services. Numerous types of banks are set up to offer various services. Commercial banks offer services to the general public and business companies as well.
On the other hand, merchant banks are comparable to investment banks because they don’t provide general banking services. Instead, they deal with business loans and investments. It offers capital to companies in the form of share ownership rather than loans. It also presents counseling on corporate concerns to the firms which they invest in.
But, what is a crypto merchant bank? On the other hand, a Crypto Merchant Bank is an accredited retailer of a growing but thoroughly curated set of hardware wallets and other crypto security brands.
The Threats to Crypto Merchant Bank
Besides learning what a crypto merchant bank is, let’s dig a little deeper as to what threats crypto merchant banks face. Traditional banks have always stood against cryptocurrencies. And the crypto market has faced tons of challenges from banks and other regulatory bodies over the years. However, some banks have embraced the change and taken a more favorable position towards cryptocurrencies and agreed to offer crypto-related services to clients.
Cryptocurrencies have faced challenges from banks and regulatory bodies over the past few years.
If you have not noticed, banks don’t like the crypto market. Nobody really does, apart from the people who do like it. Decentralization is among the most groundbreaking concepts, which is a very old concept. Banks believed that there’s a distinguished risk of fraud and even money laundering connected with cryptos. Thus, they required some penalties, like the cessation of any crypto-related bank account.
While people recognized cryptocurrencies as investment vehicles, most banks have understood that cryptos are an existential threat to them. Thus, the cause why the central banks in the US, Canada, Australia, and others banned users from using their credit/debit cards to buy Bitcoin and other cryptocurrencies.
However, notwithstanding the demand from banks, the number of companies and people using cryptocurrencies kept developing. The rising number of companies and people adopting cryptocurrencies as a payment method has noticed more banks take a more cooperative and friendly approach to cryptocurrencies.
Some banks have taken a more favorable position towards cryptocurrencies and offer crypto-related services to their clients.
Banks are now resorting to blockchain technology, with some of them declaring that the conventional banking system may have been left behind, thus the rationale why they believe threatened by cryptocurrencies. Still, some of the banks now have dedicated cryptocurrency-dedicated sections that allow people to transact using cryptocurrencies.
Banks That Are Crypto-Friendly
These crypto-friendly banks offer crypto services to millions of people worldwide, offering their customers several Bitcoin trading services. Here are some of the most popular crypto-friendly banks out there:
This bank is one of the most popular ones when it comes to supporting cryptocurrencies. They have a strong commitment to cryptocurrency and has been in the works on launching a crypto trading desk. Their dedication could make them become the destination for crypto investors in America.
Ally Bank is a great option for cryptocurrency supporters in America. As an online bank, it operates and runs at all times of the day, enabling people to buy and sell cryptocurrencies via Coinbase. It also has been around since 2010 and guarantees its clients that they wouldn’t encounter difficulties with transactions. Their credit cards can also be used to buy Bitcoin and other cryptos from exchanges.
The USAA is another Coinbase-partnered bank that promotes cryptocurrency transactions. Their connection with Coinbase allows customers to buy, sell, and invest in cryptocurrencies.
This is among the best banking choices for people living in America. The funds are insured and guaranteed by the Federal Deposit Insurance Corporation, which gives confidence to its customers. The bank also runs freely with cryptocurrency exchanges, enabling its clients to obtain cryptocurrencies. However, Simple Banks is only available for people living in the United States at the moment.
Traditional banks may have been against cryptocurrency. Some have already embraced the change and innovation and allow clients to buy, sell, and even invest in cryptos with their debit or credit cards. Apart from traditional banks, other electronic business institutions also offer crypto-related transactions on their platforms. It is not just enough to know what is a crypto merchant bank. It’s also helpful to know the threats it faces and what merchant banks to look for that are crypto-friendly. Discover more trading tips and hacks here!