Image for post
Image for post

New Age Economy Requires Banks, Payment Firms, and Startups to be Crypto-Inclusive

Cryptocurrencies are bridging the gap between finance and digital assets, slowly shaping an integrated financial system that will be totally different from the one prevalent today.

Whether you are an established bank, a payment company, or a startup, take note that the world’s financial system is going through a fundamental change, and you need to gear up for it. Your line of services is incomplete without cryptocurrency and all ancillary functions. White label digital asset bank software will turn into a complete digital bank while maintaining the core legacy system.

Understanding the term

Rather than taking the literal meaning of the term ‘banking’, you need to think of it as a process. Crypto banking facilitates the flow of cryptocurrencies into the market and performs quick transactions of all sorts. Crypto banks are digital platforms that store assets for their customers, which they can use for everyday transactions and trading.

Crypto exchanges are already doubling up as a kind of bank for crypto, though they will need to ramp up their service line to an effective alternative banking system.

How crypto banking differs from conventional banking

The value of cryptocurrencies is actuated by their demand and supply. On the other hand, a centralized institution controls the money in traditional banking. The arrival of cryptocurrencies has decentralized the system, making people the owners of their crypto assets.

Unlike the regular banks, digitally-operated crypto banks work 24×7, providing crypto traders with unprecedented flexibility.

Customers are demanding crypto services in the new age

You need to get a system designed to serve all your customers’ needs in the new age. Integrate your legacy software with a solution that offers you intuitive front-end, secure, and efficient API management system and integration with banking modules like trading, lending, and customer onboarding.

Before you rush to finalize your deal for collaboration, you need to pause and take a realistic view of what might happen in the coming years and get software that offers solutions for the upcoming challenges.

Blockchain-based crypto solutions have advanced incessantly, thanks to the contribution from both sides of the finance industry. Regulators have also now recognized the transformation taking place around them.

What to expect of upcoming crypto banks

Crypto banks of the coming era are likely to offer a full array of money-related activities, such as deposits, withdrawals, lending, borrowing, investing in a broad range of instruments, and more. While these activities are performed by conventional banks as well, crypto banks rope in cryptocurrency as well into these functions. A few years before, central banks were showing reluctance in recognizing digital coins, but now they have accepted the fact that digital coins are here to stay.

In some countries, progress has been fast. In Germany, for instance, enterprises holding fiat money and fiat-money-based assets can operate in the decentralized economy via crypto banks like Bitwala and Spot9. Crypto banks like these are going to play a big role in bringing together the segregated fiat and crypto economies, which are going to eventually merge.

Image for post
Image for post

The regulatory framework set to grow with time

A proper regulatory framework for crypto banks will come into being in the coming years. The Office of the Comptroller of the Currency in the United States has recently stated that custody and safekeeping services for digital coins are the modern version of regular banking functions. Riding on the unparalleled advantage of blockchain finance, many crypto companies will be in a position to roll out bank-like services for enterprises.

Until the regulatory framework grants full-fledged permission to crypto firms to operate as banks, they may not reorient themselves as regular banks. However, there is no such technical restriction on the banks that are already offering full-scale banking services and now desire to extend their services to crypto. There are central banks working on the digitization of their currency. On the other hand, there are banks keen on migrating to a system that is equally efficient for fiat as well as crypto operations.

A volley of good news

The good news is slowly trickling in. Goldman Sachs recently created a new vertical of digital assets and appointed Mathew McDermott as its global head, accepting blockchain as the future of financial markets.

Other news is from China, where state-run financial institutions have reportedly begun testing a wallet for the digital Yuan. According to reports, China’s central bank has set a key goal of developing the digital Yuan for the second half of 2020.

Payment firms set to play a pivotal role in the adoption

In the trail of crypto adoption, established payment companies are going to play a key role. Payment firms are showing a lot of enthusiasm in embracing blockchain as money can be moved and settled in minutes via the technology, which takes days with the current system.

Though there are several banks moving to blockchain-based payments, the adoption is comparatively slow, primarily because banks are generally massive bodies with a massive amount of data. Comparatively, payment firms are much smaller in terms of size.

Onboard a company that helps you get IBAN accounts

Time to tap into the opportunity

If you are a startup, payment firm, or a bank, there is a huge opportunity to begin moving on the trail and set yourself firmly in a leadership position. While large banks have been a bit slow in adopting cryptocurrencies, thanks to their general aversion to risk, and cumbersome structure, you can be quick to jump on the bandwagon and exploit the advantage of taking the pivotal position.

Sure, there is extreme volatility associated with cryptocurrency values, but as the market matures, it is bound to mitigate.

State of tech infrastructure

Despite the inception of bitcoin in 2019, crypto technology is still in the evolutionary stage. The tech infrastructure needs to become more advanced before the crypto takes off in banking. This explains why the investment banks have been quicker in adopting crypto compared to retail banks. JP Morgan was the first prominent bank to come up with a cryptocurrency of its own — JPM Coin.

Barclays entered into a partnership with San Francisco-based Coinbase to enable users to purchase crypto assets with sterling and withdraw money. However, in August 2019, the relationship broke off.

Right now, many high street banks lack the technology to integrate crypto with their frontline solutions. Sure, things are picking up, but it will take some time before crypto banking begins with full throttle.

Summing up

The global financial system is transforming and riding the wave will fuel your growth. Adding crypto to your band of services with white label digital asset bank software will consolidate your position. News like Goldman Sachs appointing a crypto head and China launching a digital version of their national currency is only making the sentiment stronger.

You need to assess the undergoing transformation and update your services/software so that you don’t lag behind. If you feel apprehensive regarding the regulatory framework, you don’t need to, as it will grow more robust with time.

If you are planning to start your own cryptocurrency bank, Antier Solutions can help. We provide complete banking solutions — from bank accounts, credit/debit cards, and payments to trading, lending, and user onboarding.

Written by

White label cryptocurrency exchange development, P2P exchange development, STO development & marketing, coin development, biometric wallet development

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store