Customers of some U.S. banks will soon be able to buy, hold and sell bitcoin through their existing accounts, according to crypto custody firm NYDIG.
The company, a subsidiary of $10 billion New York-based asset manager Stone Ridge, has partnered with fintech giant Fidelity National Information Services to enable U.S. banks to offer bitcoin in coming months, according to a statement released by the two firms.
Meanwhile, hundreds of banks are already enrolled in the program, according to Patrick Sells, head of bank solutions at NYDIG.
While the company is in discussions with some of the largest US banks, many of the lenders who have agreed to participate are smaller institutions such as Suncrest, a California-based commu nity bank with seven branches.
“What we’re doing is making it simple for everyday Americans and corporations to be able to buy bitcoin through their existing bank relationships,” Sells said.
“If I’m using my mobile application to do all of my banking, now I have the ability to buy, sell and hold bitcoin.”
So far, bitcoin adopters have relied on applications from a new generation of fintech players such as free-to-play brokerage Robinhood, the payment giants Paypal and Square, or crypto-focused companies like Coinbase.
Banks, on the other hand, have steered clear of bitcoin for retail customers, only recently announcing plans to allow rich wealth management clients to be able to wager on the cryptocurrency.
However, banks are now asking for bitcoin because they can see their customers sending dollars to Coinbase, Kraken and other crypto exchanges, according to Yan Zhao, president of NYDIG.
“This is not just the banks thinking that their clients want bitcoin, they’re saying `We need to do this, because we see the data,’” Zhao said. “They’re seeing deposits going to the Coinbases and Galaxies and Krakens of the world.”
With hundreds of smaller banks sign on, giants like JPMorgan Chase and Bank of America could face pressure to offer crypto to their retail banking customers, according to Rob Lee, head of digital banking at Fidelity National Information.
Fidelity National Information, which acts as a supplier to the banks, has nearly 300 million current accounts, while NYDIG will be interested in saving bitcoin and executing trades.
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