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$BTC: 300 Community Banks in U.S. Preparing to Start Offering Bitcoin Trading in 2022

An estimated 300 community banks in the U.S. are reportedly set to begin offering Bitcoin trading via mobile apps in response to high demand from clients. 

According to a report by American Banker, around 300 community banks in the United States are looking to offer Bitcoin trading to clients within the first or second quarter of 2022 with the help of Bitcoin company NYDIG. The report claims the American Bankers Association and the Independent Community Bankers of America have made investments in NYDIG as part of the effort. 

NYDIG is “a subsidiary of Stone Ridge, a holding company that has led the creation of forward-thinking firms across the worlds of technology and finance, including a $12B+ alternatives asset manager.” It provides “Bitcoin products across industries, from banking and insurance to fintech and nonprofits.”

Harold Reynolds, CEO of Georgia-based BankSouth with over $1.3 billion in assets, said:

We have seen significant activity in cryptocurrency transactions from our customer accounts, and a few investments have been rather large, so that is obviously getting our attention.

As Oklahoma-based Vast Bank reported on 4 February 2021, on 27 January 2021, via a partnership with Coinbase, it “successfully executed” an “end-to-end cryptocurrency transaction”, thereby becoming “the first nationally chartered financial institution to both purchase and provide custody services for a digital asset on behalf of a customer and directly from their bank account.”

Then, on 25 August 2021, Vast Bank, which is “a trusted family-owned financial institution serving customers since 1982”, announced “the rollout of its new Crypto Banking service.”

Vast Bank CEO Brad Scrivner said back then:

We take pride in getting to know our customers, and that starts with listening. At the heart of many of these conversations is crypto. For quite some time, our customers have been asking why they cannot securely purchase the likes of Bitcoin using their bank account, citing concerns over trustworthiness, safety, and the security of other platforms—all issues which have kept many consumers parked on the sidelines of the crypto phenomenon.

We took this challenge head on, and devoted significant resources to answer this unmet need. We’re excited to bring this service online, and give all consumers the opportunity to explore the world of cryptocurrencies in a way that brings peace of mind that only a bank like Vast can provide.

That August 2021 press release went on to say that “through the Vast Bank Crypto Banking application, customers will have the ability to purchase a range of cryptocurrencies including Bitcoin, Bitcoin Cash, Cardano (Ada), Ethereum (Ether), Litecoin, Orchid, and Algorand.”

According to American Banker’s report, Scrivner is pleased with how well this service is doing so far:

The Vast crypto banking launch has gone well. In the first four months since launch, we added approximately five times our historical retail customer base and those customers are in all 50 states and three U.S. territories.

On January 25, Flushing Financial Corporation (Nasdaq: FFIC), which is the parent holding company for Flushing Bank, issued a press release to announce that it had entered into an agreement with NYDIG to offer Bitcoin services to its clients.

Per the bank’s press release, John Buran, President and CEO of the bank, had this to say:

As part of our ongoing digital transformation, we recognize the importance of staying current with emerging market trends and consumer demand for alternate financial services. Using NYDIG’s innovative technology to provide seamless access through our relationship with Q2, our online banking provider, we will be able to offer our customers the ability to buy, sell, and hold bitcoin. This partnership provides our customers with a fully integrated solution to conduct bitcoin transactions in a safe and secure environment.

And Patrick Sells, chief innovation officer at NYDIG, stated:

On behalf of NYDIG, I’m excited to welcome Flushing Bank and its customers to the bitcoin network,” said Patrick Sells, chief innovation officer at NYDIG. “Consumer interest in bitcoin is growing rapidly and NYDIG has the tools and expertise to help community banks meet that demand. Together with forward thinking institutions like Flushing Bank, we’re on the path to achieving our mission of bitcoin for all.

DISCLAIMER

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.