Digital Asset Banking: Here’s What Our Research Tells Us
Cryptocurrency is having a huge impact on the way that we think about our assets; the ideology that assets must be physical is well outdated, with the world currently seeing a huge shift towards digital tokens and items that can be owned, transferred, and traded by anyone. This digital transformation does not come as a surprise, however; the movement towards a total online economy has been in motion for many years but has accelerated in recent times. This acceleration has, in part, been caused by the rapid development of new technology, which has enabled more and more people to take advantage of digital currencies in a way that is completely seamless. With modern digital asset banking accounts now being offered by many different operators, it’s incredibly important to ensure that you’re choosing a banking solution that makes sense for your business. Without the right tools and platforms at your disposal, it can become incredibly difficult to operate efficiently within the crypto markets, so by spending the time to discover the right platforms and partners to suit your needs, you can be sure that you’re working in the best possible way.
One of the key things to look out for when searching for digital asset banking is security; as a new industry that is very much still in its early stages, it’s natural for security protocols to still be in the process of being implemented. In the past, there have been concerns raised about the safety of the digital asset economy, however, in more recent times these fears have been subdued by the introduction of more thorough regulation and trusted relationships being built between users and their partners. As a BCB Group Business Account holder, you’ll be able to conduct your crypto activity with the knowledge that we’ve taken the necessary steps to protect you. Our AML policy is comprehensive and each entity within our settlement network is pre-approved by our AML checks, which means you’ll be able to make safe, secure transactions with instant settlements.
What Trends Have We Seen in the Industry?
Digital assets lack clearinghouses, which enable transactions between two parties to be trusted. As a result of this, it is very difficult to recover funds in the event of fraud. Crypto businesses have therefore resorted to custody solutions that facilitate secure digital asset storage, transfer, and transaction monitoring.
A federally chartered bank and savings association will be able to offer their clients digital asset custody services starting in October 2020 under authorisation from the Office of the Comptroller of the Currency (OCC).
Leading traditional banks have since made strategic investments in digital asset custody firms and are in the process of extending custody services to their clients. The fifth-largest bank in the United States, US Bank, has recently announced a partnership with crypto custodian NYDIG.
US financial institutions generally utilise Fedwire’s real-time gross settlement system to facilitate real-time payments between them. Wire transfers via Fedwire are only available during business days (i.e., no wire transfers on weekends or holidays), and their fees are opaque and variable. In terms of pure time, Fedwire operates 66% of the week’s hours. A digital assets firm that relied on a single banking relationship in the United States would only be able to move dollars about two-thirds of the time; a constraint that might preclude you from providing 24/7 service to your customers. Despite this gap, few banks have built solutions to meet their clients’ immediate and efficient settlement needs. To help reduce the impact of this, BCB Group has introduced a 24/7 solution that allows businesses to access a settlements network for digital assets and fiat money around the clock, leading to higher user satisfaction, avoidance of slippage and heightened functionality for everyone involved on the network.