New Crypto Banking System Coming Amidst Coinbase and Binance Crackdown

Updated: 10 June 2023

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2023 has seen the downfall of major banking institutions such as Silvergate Capital Corp and Signature Bank. That led people to focus their attention back on cryptocurrencies, which in turn, resulted in Bitcoin climbing above the $20k mark.

However, crypto firms do need the aid of some traditional banks for their bank accounts. Amidst this requirement, a few banks have arrived, heralding a new crypto banking system that is:

More fragmented
Less US-centric
And less advertised.

Regulatory Scrutiny Turned Banks Against Crypto

People consider 2022 to be a revelation in the crypto space. The crypto winter revealed many major players in the space, and many were proven to be fraudulent – such as FTX. That resulted in traditional US banks becoming weary of the crypto industry, with many refusing to hold their deposits and process wire transfer.

Amidst this, two main banks – California-based Silvergate and New York-based Signature, became a go-to for crypto exchanges to process transactions.

But after these banks got close to being dissolved earlier this year, crypto firms started to scramble for better alternatives.

Crypto Firms Turning to Regional Lenders for Opening Bank Accounts

The US is seeing many crypto firms going to regional lenders, such as Pennsylvania lender Bancorp Inc. to open their bank accounts. It, along with many Swiss and Asian Banks, has become a favorite of many customers. However, the latter two are still largely selective about which crypto firm they choose as their client.

This new, low-key, and fragmented approach is becoming preferable as the new banking system of crypto. Bloomberg got information from a dozen of industry participants. And thanks to that, we have a list of banks that are ready to receive crypto-centric clients.

New Crypto Banking System Involves Opening Accounts in Low-Tier Banks Rather than Going After Big Ones

It has always been hard for crypto exchanges to find banking partners. Many traditional banks aren’t up to date with the crypto developments. And many who are, still avert their eyes due to apprehension.

However, the future of economic development lies in ensuring that crypto and traditional finance stay together. And the recent receptiveness of regional banks towards crypto means the arrival of a new, flexible system that even those limited to TradFi will appreciate.

Banks in America

Here is the list of Banks in America that are still receptive toward crypto firms as clients:

Customer Bancorp

Customer Bancorp is a Pennsylvania bank headed by CEO Jay Sindhu. This bank has been serving crypto-centric customers since 2021. It has launched a real-time platform that is similar to Signature’s Signal. That platform caters to exchanges, trading firms, and institutional investors. Transfer of US dollars is possible through this bank.

Cross River Bank

Cross River Bank is a New-Jersey Based firm located in Fort Lee. Known for its ties with fintech firms, this institution has provided banking services to the likes of Circle and Coinbase. It offers real-time money movement but limits the transfer to $1 million per transaction.

However, this bank is very selective about its clients. According to Cross River spokesperson Josh Viasto, it is only looking to associate with “blue chip customers who are integral to the fin-tech ecosystem.”

Western Alliance

Western Alliance Bancorp is a Phoenix-based bank. It has a digital assets and blockchain team that serves crypto-based clients. And with Tassat, it also provides real-time payment capabilities.

Exos Financial

Exos Financial is a Las Vegas-based bank. Binance.US is one of its customers. The bank previously held ambitions to create a stablecoin and support retail crypto trading. And while the recent regulatory issues have created a bump in that road, Exos has said that those plans will still come.

Another bank is the FV Bank, which is also willing to provide these services.

Banks in Asia

In Asia, the banks that are leading the charge when it comes to accepting crypto firms as clients include:

Standard Chartered Bank
DBS Bank, and
ZA Bank

Banks in Europe

BCB Group, Bank Frick and Co, SEBA Bank AG, Signum Bank, and Clear Junction are the banks/payment services providers that have extended an olive branch to crypto firms and institutions.

This new, less-advertised crypto banking system has its perks. Emerging banks are more receptive to innovation. And it also gives a chance to customers of these banks to engage with crypto firms.

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