Crypto banking service is different from the traditional ones that we all are acquainted with for decades, since childhood. It is a very new concept. It is a term used for managing cryptocurrencies at a banking provider or any other financial service provider. It is gradually gaining popularity across the world. It facilitates buying, selling and trading of digital currencies through an internet connection. A couple of examples of crypto banking include Ally Bank, Wirex, JPMorgan, Goldman Sachs and Barclays. These banks facilitate the management of digital currencies.
The operation of crypto banking is similar to that of trading banking or financial companies. These hold cash and stocks for customers and investors. However, it does not hold fiat currency. It deals only in digital assets.
Considering an example here for better understanding, let us take a look at the Vast Bank. It offers both business and personal banking products like savings accounts, checking accounts, CDs, credit cards and loans. It is a small bank and hasÂ been serving for more than three decades; it lately broke into virtual or crypto banking. It has acquired immense attention in the United States. It facilitates buying, selling and holding of crypto assets.
In brief, it can be said the crypto interest account is simply a savings account with a crypto version instead of a fiat one. The interest rates in such accounts are around 10 percent and of course it is more than the interest rates of a savings account. A few examples of such accounts are the ones offered by Outlet Finance, Nexo, Linus, Gemini and BlockFi.
Most crypto accounts are free from any monthly fee and this facilitates holding more money. Vasta Bank and Quontic Bank offer crypto checking accounts. Rewards are offered to customers for making purchases. If the Quontic debit card is used to make purchases either online or in-store, about 1.5 percent of the total transaction is converted into Bitcoin.
There are other ways to get started. It is not necessary to own a cryptocurrency to become a part of crypto banking. One can sign up and thereafter purchase crypto coins. No middleman like a bank or a brokerage is required. A couple of apps simultaneously help in opening an account in the crypto banking segment.
It is believed the cryptocurrency segment may disrupt the traditional financial sector in the short run. If this happens, it means an increase in associated risks as the segment is not FDIC insured and the crypto market is highly volatile. Moreover, the risks of fraud, theft and hacks exist.