Undoubtedly Cryptocurrency is enjoying its best phase currently. But, it’s a fact at the same time that cryptocurrency is yet to be trustworthy for the large banking sectors. Remaining under the sheds of prime banking institutions, the cryptocurrency market has though entered in to various other industries.
Top organizations like Bank of America are still trying to stay away of cryptocurrency based transactions. Similar is the case about JP Morgan Chase and Co. as well. On the other hand, the comparatively smaller institutions like Silver gate bank have entered in to this revolution. These banks have started having significant amount of shares, thus entering the direct cryptocurrency market. Silvergate bank is primarily based in San Diego. This local bank operates through its three branches, and has opened more than 250 cryptocurrency based companies in the last year. It is said that this strategy of them managed to multiply their property in an envious fashion, which has reached 1.7 billion US dollars at present.
By letting ventures based on cryptocurrency make use of their services; small branches have managed to grow their deposit amounts and earning, without feeling any need to shift new locations or to grow the interest rate. In short, cryptocurrency has turned out to be a creative solution in comparison with the same conventional banking methods. Especially, the banks dealing with various financial risks have managed to grow at a significant rate through these strategies.
Mark DeFazio, CEO of Metropolitan Bank has said in an interview that-
We noticed a long time ago that the payments world was changing.
It is here to mention that Metropolitan Bank Holding Corp. has managed to grow the business three times after becoming a leading lender for cryptocurrency businesses across the nation, in the year 2017.
The Risks of Crypto Banking
Cryptocurrency has indeed appeared as one of the most convenient option for the smaller banks. But, the fragile market scenario and tentative administrative process still associates a lot of risk with this digital currency, from banking sector point of views.
Brian Stoeckert, a partner at consulting firm Stratis Advisory has to state that-
They’re taking on a risk, and going against the inherent view (of crypto) that ‘It’s all evil over there, don’t touch that stuff
Upon accepting the risks associated with the cryptocurrency based businesses, smaller banks have managed to fetch attention of the clients those would have gone for taking help from the larger organizations.
Michael Moro, CEO of Genesis Global Trading Inc said regarding his relationship with Silvergate Bank and their CEO, Alan Lane that-
I sat down with Alan early on and he cared about Bitcoin… He really believed in the potential of what this might become, and honestly it sort of was a refreshing take given the sentiments expressed by some of the other banks, especially the biggest ones.
As cryptocurrency rules are getting tougher keeping the future payment processes in sight, the banking industry, which used to remain in confusion once, is expected to adapt, keeping the market demand in sight. Especially, the top banks like Tokyo-Mitsubishi have started enjoying the process. In fact, some have started thinking about their own cryptocurrency.