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Bitcoin is coming to hundreds of US banks: What you need to know

US Banks to start using Bitcoin
(Image credit: Bitcoin)

The ability to buy, hold and sell Bitcoin directly from your U.S. bank account is coming soon, thanks to a partnership between NYDIG (New York Digital Investment Group) and FIS (Fidelity National Information) to bring Bitcoin services to hundreds of U.S. Banks this year.

The head of bank solutions for NYDIG, Patrick Sells, told CNBC, " What we’re doing is making it simple for everyday Americans and corporations to be able to buy Bitcoin through their existing bank relationships."

According to Sells, hundred of banks have already jumped on board as the partnership hopes to simplify the process, removing the need for intermediaries on the Bitcoin exchange services. Yan Zhao, President of NYDIG, stated to CNBC, " banks are seeing deposits going to the Coinbases and Galaxies and Krakens of the world, and want to capture that movement."

According to CNBC’s report, the partnership will have NYDIG in charge of Bitcoin custody and trade execution with FIS acting as a vendor to banks with almost 300 million checking accounts as FIS will handle the link to lenders.  

Sells stated, "Going this route allows average Americans to get involved in the world of crypto without the need to use apps like Coinbase, PayPal, or Robinhood, to purchase, hold or trade Bitcoin or other cryptocurrencies. The hope is that this partnership will help banks," drive fee income and better attract and retain customers," according to the partnership’s press release.

Rob Lee, the head of global core banking and channels for FIS, stated in the press release, " As demand for bitcoin as a store of value continues to grow, FIS is focused on enabling our core banking clients to respond to growing market demand and better serve their customers." He further stated that "once a financial institution enables this solution, their customers will be able to view and manage bitcoin holdings alongside their traditional accounts in a single view."

Most of the banks that are part of the initial "hundreds of banks" are smaller local banks. At the same time, banking monoliths like JP Morgan Chase and Bank of America have yet to sign up. Still, they could feel the pressure to do so, according to Rob Lee, head of banking for Fidelity Nationals Information. This past March, Morgan Stanley jumped into the crypto market by becoming among the first banks to offer Bitcoin funds to its clients, with Godman Sachs rapidly following suit. According to an April report from Coinbase, JP Morgan Chase is looking to roll out an option for its clients to invest in Bitcoin and other cryptos this summer with the help of NYDIG.

Cryptocurrencies have become a massive opportunity for average Americans and people worldwide to invest affordably and grow their finances. Big banks have been missing out on the billions of dollars being made in transaction fees. It's always about the fees! With megabanks getting involved, could this usher in the end of smaller investors or take crypto investing out of the hands of ordinary people? Only time will tell.