Crypto Industry Struggles To Access Banking Services In The US, Report Shows

Due to various factors, the crypto industry faces increasing difficulty finding banking services in the US, according to a Bloomberg report, banks have hesitated to work with crypto customers. Recent events such as the closure of crypto-friendly Silvergate Capital Corp. and the seizure of Signature Bank by regulators have made banks even warier about providing services to the industry.

Per the report, although there is no blanket ban on serving crypto clients, financial firms are imposing “lengthy” application procedures, turning away smaller crypto companies and some retail platforms, and in some cases, allegedly completely shutting the door on crypto businesses. 

Will The Crypto Industry Be Able To Overcome This Situation?

According to Bloomberg, after the collapse of Silicon Valley Bank (SVB) and Signature Bank, Cross River Bank received requests from over 100 new clients seeking a safe place to deposit their funds. 

Don't wait! Jump on this Crypto Deal and get a 150% Welcome Bonus plus 100 Free Spins on your deposit today! 570% up to 12 BTC + 300 Free Spins for new players & 1 BTC in bonuses every day, only at Wild.io. Play Now!

However, the bank allegedly turned down almost all of those requests, only considering companies with existing relationships with Cross River that were “blue-chip” customers and “integral” to the fintech ecosystem, a spokesperson told Bloomberg.

The increasing caution of financial institutions in serving the cryptocurrency industry is becoming more apparent, with some banks even turning away non-crypto companies seeking a safe place to deposit their funds. This reluctance to serve the industry has made it challenging for crypto companies to find reliable banking services, exacerbating the challenges of operating in a largely overregulated environment.

Moreover, Cross River Bank, a closely-held company based in Fort Lee, New Jersey, has allegedly only accepted a few crypto companies, including stablecoin issuer Circle Internet Financial Ltd, which expanded its partnership with Cross River after the collapse of SVB.

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?

No Clear Picture Ahead For The Industry

Per the report, while some big banks, such as JPMorgan Chase and the Bank of New York Mellon, appear willing to do business with crypto firms selectively, the onboarding process with these institutions can be “quite lengthy,” up to six months, Bobby Zagotta, CEO of Bitstamp told Bloomberg. He further claimed:

There are other alternatives that are small that could emerge as a next evolution of this kind of payments space, but it’s absolutely unclear to me who that might be, and based on what. From our conversations with our customers, we haven’t heard anyone who has a clear picture.

Overall, the lack of access to banking services is a significant challenge for the cryptocurrency industry, as it limits the ability of companies to operate and grow their businesses. 

The industry is calling for greater regulatory clarity and support to help promote the growth and development of the cryptocurrency industry, like the case of Coinbase with its different measures to ask for a regulatory framework that enables the crypto industry to continue to provide its services in the US and further growth in the future. 

TOTAL_2023-03-30_17-48-54_fc485-860x407.pngThe total market capitalization on a sideways period on the 1-day chart. Source: TOTAL on TradingView.com

Feature image from Unsplash, chart from TradingView.com

Source Link

« Previous article ‘Killer use case’: Citi says trillions in assets could be tokenized by 2030
Next article » Polls suggest Elizabeth Warren's anti-crypto army strategy may not pay off