Bitcoin and the 2,000+ altcoins that are currently on the market are slowly crossing into mainstream territory in a number of different ways. There are still several major plateaus that have yet to be reached, but the crypto-corporate partnerships that are being formed on a daily basis indicate that executives are warming up to cryptocurrencies. When clients clamor for Bitcoin and crypto profits start looking like low hanging fruit, change happens.
When will banks start accepting bitcoin and cryptocurrency deposits?
Japanese banks are already working on creating their own cryptocurrency called the J-Coin. As the Financial Times reports, Mizuho Financial Group and Japan Post Bank earned support from the country’s central bank and financial regulator to launch the project. The coin is designed to be pegged to the yen and easy to spend in stores via smartphones. Mitsubishi UFJ Financial Group, one of the largest bank in the works, is planning a rival cryptocurrency, MUFG Coin, for 2019.
Back in the States, retail customers at Chase, Wells Fargo, Bank of America as well as local banks are wondering when they’ll be able to deposit crypto directly into their traditional bank accounts. Banks could instantly trade the crypto into fiat or create wallets on behalf of their clients for management. For crypto purists, the idea of banks intervening may be unsettling at best, but normalizing cryptocurrencies as regular bank deposits would go a long way toward adoption overall.
Banks are already creating symbiotic relationships with digital asset exchanges and blockchain networks that utilize cryptocurrencies. Leading cryptocurrency exchange Bittrex announced today that it’s launching fiat trading for Bitcoin, Tether and TrueUSD for corporate clients in California, New York, Washington and Montana.
We offer one of the biggest selections of innovative tokens available around the globe. Today we announce the introduction of US Dollar (Fiat) trading for approved corporate customers, followed by all qualified customers as we roll out additional phases. https://t.co/LBGlo9QDdB
— Bittrex (@BittrexExchange) May 31, 2018
Prior to today, Bittrex only permitted coin-to-coin trades. To implement their new service, they passed strict AML/KYC qualifications by their banking partner, New York-based Signature Bank. The move preps Bittrex for head-to-heard competition with Coinbase and Gemini, two of the most popular US exchanges, allowing traders to make fiat deposits directly from their bank accounts. Bittrex hopes to expand fiat trading to its base of 3 million retail traders.
Coinbase, the leading US crypto trading platform, has already established strong relationships with several US banks including Silvergate Bank, Cross River Bank and Metropolitan Bank.
Like most banks, Bank of America is interested in high-volume transaction solutions to reduce costs associated with cross-border transactions and to speed up settlements. Ripple, with a growing network of partners, is the leading solution for banks. Bank of America, a partner on RippleNet, is testing transactions on the blockchain. It’s joined by several other large banks, including Credit Agricole, Mizuho Financial Group and Santander. Kuwait’s biggest Islamic lender, Kuwait Finance House, also just announced that it has joined RippleNet.
Ripple’s native cryptocurrency XRP may or may not become a factor for every use case by every bank interested in Ripple’s wide array of banking solutions, but the Ripple-XRP-banking correlation creates an environment where cryptocurrencies are no longer deemed fringe instruments for money laundering and other criminal activity.
Cryptocurrencies are solving major corporate issues surrounding governance, verification, security, speed and cost, and they’re inventing viable solutions. As developers continue to remove bottlenecks, improve scalability and fortify security, and as more banks adopt blockchain technology, driving down costs and related fees, more financial institutions will be forced to compete, or they’ll risk going the way of Blockbuster Video and Tower Records.
Once enough banks have embraced digital ledger technology, supporting Bitcoin will be a much easier step, allowing customer deposits and potentially offering Bitcoin as a payment method for credit cards as well as auto-payments for monthly bills that are linked to checking accounts.