While big banks on Wall Street such as the Bank of America, JP Morgan, Chase, Wells Fargo, Discover, TD Bank, PNC Bank, Citigroup, and Capital One are spurning Bitcoin (BTC), small banks in the US are making real money in the crypto market regardless of the risks and uncertainties of the industry. The Wall Street Journal reports several banks including Silvergate, Cross River Bank and Metropolitan, are issuing premium crypto-asset banking solutions to clients.
Generally, cryptocurrency exchanges rely on financial institutions to store and transact their money. The institutions also pay their daily expenses such as rent. Hence, the small banks are taking risks to fill the gap in the market by working closely with crypto firms.
Banks Taking Calculated Risks
Silvergate Bank, located in San Diego, supports more than 250 crypto firms. Additionally, the bank increased its revenue from $978 million to over $1.9 billion last year. The majority of these small banks are increasingly supporting cryptocurrency startups by giving them banking solutions to grow their businesses.
Silvergate recently said it has managed to convince hedge funds, family offices and other institutional investors to conduct cryptocurrency related business with them. Those same parties were unable to find a willing bank to conduct that same type of business. According to Silvergate CEO, Alan Lane, despite associated crypto industry risks, the bank will continue opening doors for all clients.
Unchained Capital, based in Austin, Texas, offers numerous services to BTC miners including quick cash loans and speedy worldwide transactions. Bankline offers reliable banking procurement and cash logistics services. In addition, it supports Bitcoin ATM and other virtual coins.
The Trend Is Global
The trend of small banks supporting crypto asset growth and developement is not just limited to the US. Financial institutions across the world are focusing on the digital currency markets. For instance, Falcon and Vontobel banks in Switzerland, Fidor in Germany, and others have positively embraced the advanced technologies and new innovative products in the crypto markets. This has helped them earn huge revenues.
Since the cryptocurrency industry is still unregulated, the markets are full of risks and uncertainties. However, small banks are keeping their businesses safe by knowing clients well and working with bank regulators closely. Though there has been a lack of sufficient support from the government and other large financial institutions, cryptocurrency markets and blockchain technologies continues to flourish.