Blurred Lines: Google to Launch Banks Accounts As Canada’s Biggest Bank Eyes Bitcoin and Crypto
Tech giant Google is moving into banking. It plans to roll out checking accounts via its Google Pay mobile app as early as next year, reports the Wall Street Journal. Dubbed “Cache” the new platform will be a collaboration with banking partners.
Citigroup and a small Stanford University credit union will handle Cache’s regulatory compliance and the financial backend. The partnerships will allow the financial institutions to brand the new accounts with their own names, not Google’s.
According to WSJ, Google’s addresses a sticking point that has rattled Facebook in its efforts to move into finance: private financial data. Google claims it won’t be up for sale to the highest bidder and that the information harvested by checking account holders would not turn into a cash cow driven by hungry advertisers.
Says Google executive Caesar Sengupta,
“If we can help more people do more stuff in a digital way online, it’s good for the internet and good for us.”
Google has plenty of internet eyeballs. It operator of the world’s first and second-most frequented websites: Google.com and YouTube. In May the company revealed that its mobile operating system Android powers 2.5 billion active devices that are hooked up to the internet. Meanwhile, its Google Pay user base is expected to reach 100 million by 2020, giving the tech giant a huge springboard to amass a new base of banking customers. It can target mobile-friendly and tech-savvy Millennials as well as consumers who have smartphones but no bank accounts.
Google continues to expand its own ecosystem of consumer-facing platforms and incentives to generate digital value that moves across the internet. The company recently announced that Google Play Points has launched in the US. The platform allows users to earn points on everything they buy with Google Play, including in-app items, movies, books and subscriptions, and by downloading featured free apps and games.
As giant tech companies, from Alibaba to Facebook, aim to move deeper into finance, traditional banks are looking for ways to leverage the trust they’ve built up over decades by developing new services that are more aligned with the mobile-friendly, on-demand digital economy.
The Royal Bank of Canada (RBC), the country’s largest bank with over $965 billion in assets, is exploring how to integrate Bitcoin and other cryptocurrencies into its operations. One approach is to launch a cryptocurrency exchange.
According to a report by the Logic, the bank is considering offering ways for customers to open bank accounts that allow people to buy crypto, including Bitcoin and Ethereum.
RBC applied for four patents in the US and Canada that indicate how it might implement a crypto strategy. One of the patents reads,
“To individual users, managing cryptographic keys and transacting with different cryptographic assets can be a challenge. In some situations, cryptographic asset transactions may take time to be confirmed, and/or may not be compatible or supported by merchant systems or point-of-sale devices.”
While such an approach is counter to the mission of creating a decentralized financial system that removes intermediaries, it could trigger a powerful step in the widespread education and adoption of crypto, as it would allow new users to rely on their traditional bank to help them explore cryptocurrency and manage potential investments.
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