Cryptocurrencies, once heralded as a financial revolution that would render traditional banks obsolete, have come to coexist with these institutions rather than replace them. In reality, banks still serve as essential fiat on and off-ramps for the vast majority of crypto holders and traders. While traditional brick-and-mortar banks may have been slow to embrace cryptocurrencies, digital-only neobanks have stepped up to fill this gap. These online banks have become go-to choices for users seeking seamless crypto transactions and services.
Monzo, a British online bank based in London, emerged as one of the early disruptors in the digital-only banking sector, challenging traditional players. With over 7 million users as of January this year, Monzo openly embraces cryptocurrencies. While Monzo accounts are fully authorized by the UK government and insured for up to £85,000 per account, they do not offer native cryptocurrency services. Monzo allows fund transfers to regulated crypto exchanges in the UK, such as Coinbase, but not to platforms like Binance. It’s essential to note that Monzo is exclusively available to users based in the UK with valid UK addresses.
For users in the United States, Ally Bank is a notable online banking option. Based in Utah and founded in 2009, Ally Bank boasts 11 million customers and $154 billion in deposits. In addition to competitive interest rates on savings accounts, money market accounts, and certificates of deposit (CDs), Ally Bank is part of a fee-free ATM network with over 43,000 ATMs available for cash withdrawals. A
lly Bank is FDIC-insured, offering protection for deposits up to $250,000 per depositor for each qualifying account category. While Ally Bank doesn’t offer direct spot crypto trading on its platform, it provides various crypto-based investment products, including crypto trusts, bitcoin futures ETFs, and crypto stocks. Like most other banks, Ally Bank allows fund transfers to regulated crypto exchanges.
Wirex, a mobile payments platform based in London and founded in 2014, has gained popularity among crypto enthusiasts. While Wirex isn’t technically a bank and lacks state-backed deposit insurance, it positions itself as a “Web3 money app.” Wirex offers a wide range of crypto-related products and services, including exchanges for over 50 fiat and crypto currencies, fiat and crypto payments, as well as various savings, lending, borrowing, and reward programs.
They even offer “Cryptobacks,” providing up to 8% cashback on every card purchase. Wirex has its native token, WXT, used for subscription payments and other rewards. Available in over 40 countries, Wirex recently signed a global partnership with Visa to expand its presence in the Asia-Pacific region and the UK.
Revolut, founded in 2015 and based in London, has become a global fintech giant with over 18 million customers worldwide. It caters to residents of the European Economic Area, Australia, Singapore, Switzerland, Japan, the UK, and the US. Revolut offers a suite of crypto services, including buying, selling, and transferring crypto directly from the app, as well as crypto learning and earning programs. Similar to Wirex, Revolut’s crypto services are not regulated or deposit-insured.
Crypto custody is achieved through cold storage via third-party custodians, ensuring private keys are not connected to the internet. In the EU and EEA, Revolut operates as a bank regulated by the Bank of Lithuania, providing coverage of up to €100,000 per depositor in the event of its failure. In other countries where it is available, Revolut is not a bank and is regulated differently, so users must review the specific terms and conditions relevant to their location.
Future of Crypto-Friendly Banks
While there are not many platforms that offer a one-stop-shop for both fiat and crypto services, online-first and online-only neobanks appear to be more agile in adopting cryptocurrencies than traditional incumbents. As the crypto space continues to evolve, these digital banks will likely play an increasingly vital role in connecting the traditional financial world with the digital future of finance. As we move forward, it’s crucial for users to carefully assess their banking options and consider factors like regulatory compliance, deposit insurance, and the range of crypto services offered.
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