When most people think of Bitcoin and traditional banks, they usually see the combination of the two financial systems as a bit of an oxymoron. After all, removing the large amount of trust required in banks is mentioned as a key feature of Bitcoin throughout Satoshi Nakamoto’s original white paper on the subject. But now, the worlds of Bitcoin and traditional banking are merging, as more and more cryptocurrency companies are interested in obtaining banking licenses and legacy financial institutions are looking into how they can use cryptocurrency to enhance their current offerings for their customers.
Best Crypto-Friendly Banking Apps
eToro
- Great for cryptocurrency beginners
- Solid crypto/general trading platform
- Reliable company with solid trust in the community
- Fully supports credit cards for deposits and withdrawals
FINANCING METHODS e-Transfer & Bank Transfer
CRYPTOCURRENCIES 15+
COUNTRIES 70+
Robinhood
- A great one-stop-shop for anyone looking to invest in cryptocurrency or stocks
- A simple onboarding procedure requires very little of the user
- Fully regulated financial institution in the United States
- ETH, LTC, BCH, DOGE, ECC and BSV
Support for BTC,
SUPPORTED CRYPTOCURRENCIES BTC,
ETH, LTC, BCH, DOGE, ETC, BSV
COMMISSIONS Commission-free trading
Wealthsimple Crypto
- All-in-one app offering banking, stock, and cryptocurrency options
- Wealthsimple Crypto is only available to Canadians
- Wealthsimple is very safe and insured by several regulators
- One of the fastest growing online financial institutions in the world
SUPPORTED CRYPTOCURRENCIES Bitcoin and Ethereum
COMMISSIONS Spread added to orders
PROMOTION Receive a $10 bonus when you open an account and deposit and trade a minimum of $100 within 45 days
SoFi Crypto
- Get $10 when you start trading crypto assets
- Only available in the U.S.
- Complete custody platform
- ETH, LTC, BCH & ETC
Supports BTC,
SUPPORTED CRYPTOCURRENCIES 30+ (Bitcoin, ETC, Cardano)
COMMISSIONS 1.25%
Cash App
- One of the easiest ways to buy Bitcoin
- Owned by Financial Stalwart Square
- You can withdraw your Bitcoins to a personal wallet, unlike competing apps
- Really easy registration process
- Reliable and trustworthy
SUPPORTED CRYPTOCURRENCIES only Bitcoin
COMMISSIONS ~1.75%
The history of banks that support cryptocurrency
While the idea of “crypto-friendly banks” may seem strange at first, the reality is that we are still in the early days of Bitcoin’s development as a new digital financial system. In these early days, it is important for Bitcoin to be integrated into the traditional banking system because people need to be able to switch from the old system to the new system (and vice versa) smoothly. After all, not many people are still paying rent, groceries, and other necessities with cryptocurrency.
Bitcoin’s entire purpose was originally to remove trusted third parties, but at the end of the day, people still appreciate the convenience and ability to have all their assets accessible from a single interface. Therefore, we are now moving into a world of crypto banks friendly to cryptocurrency enthusiasts around the world. By opting for a forward-thinking bank that encompasses the Bitcoin ecosystem, customers are able to access lower fees to move back and forth between cryptocurrencies and traditional fiat currencies, a smoother experience when trading, and a more user-friendly version of the crypto revolution.
What to Look for in a Friendly Crypto Bank
So, what are the key features to look for in a crypto friendly bank? If you don’t know where to start, don’t worry. We’ve got you covered. Here are some of the key deals to look for when looking for the right bank for all your cryptocurrency-related businesses.
Ease of use
A key problem area for Bitcoin and cryptocurrencies is still ease of use. This is a new technology that completely changes the way people have to think about the security of their digital money because of the way cryptocurrency payments work, i.e. they are irreversible. The fact that someone can lose their private keys, get hacked, or simply send an irreversible payment to the wrong person has created many problems related to ease of use. However, this is much easier for crypto banks to fix, as they usually take custody of their customers’ crypto assets. An interface that makes it easy to observe your crypto wallet and switch between fiat and crypto balances allows you to remove a lot of stress associated with how crypto protocols work at the basic level.
safety
Security is an issue that needs to be taken with the utmost seriousness in the cryptocurrency space. The fact that it’s easy to send a fatal payment also means that it can be much harder to fix things when something goes wrong from a security perspective, so the level of security offered by a friendly crypto bank must be seen as the number one priority. Look for a bank that has a long experience in the cryptocurrency ecosystem without facing serious hacking incidents, as these are the institutions that will best protect your crypto holdings.
reliability
Reliability is a factor that combines many different features of a crypto-friendly banking institution. Security is obviously a key ingredient, as you need to know that hackers won’t be able to steal your money. In addition, you should examine the licenses and registrations obtained from the bank. You don’t want to choose a bank that is located in a questionable jurisdiction or has anonymous founders, as these situations often end with customers becoming victims of an exit scam.
taxes
Fees are a key area of interest when people first get involved in bitcoin or cryptocurrency trading because users don’t want to pay a high fee every time they switch from crypto to fiat. However, it should be remembered that you will always get exactly what you paid for in this area. There’s nothing wrong with paying low fees, but make sure you don’t sacrifice other factors, such as security, in exchange for a small interruption in commission payments. That said, fees for switching between different assets at crypto-friendly banks have become more reasonable over time.
Extra features
In addition to basic concerns about things like fees and security, crypto bank users should also think about additional and niche features offered by some crypto banks. For example, will you be able to use a bitcoin-backed debit card with your preferred crypto bank? What about interest accounts? Can you earn interest on your crypto holdings? These are some of the additional features you might want to consider being able to access a crypto bank.
app
We live in a mobile-first world these days, so the quality of a crypto-friendly crypto bank’s Android and iOS apps will be an important factor in choosing a crypto financial institution. The main thing you want to look into here is whether all the features offered by the bank are available through the mobile app.
Rewards
Another factor to consider when choosing a crypto friendly bank is whether you will be able to earn interest or rewards on your money using the bank’s products and services. This could be anything from rewards on a debit card associated with the crypto bank to the ability to earn interest on some bitcoins the bank holds for you.
availability
The availability of a particular crypto bank is something that can be difficult to define right now, as cryptocurrency regulations are still very much evolving in various jurisdictions. For now, it makes sense to keep track of crypto regulations in your area and stick to bitcoin banks that are able to operate legally in your country.
Switching to and from Fiat currencies
We are still in the early stages of the Bitcoin revolution, so you will still have to use traditional fiat currencies from time to time. Whether you’re paying your bills with cryptocurrencies or want to be able to buy coffee with a Bitcoin-based debit card, be sure to examine how easy it is to move between the world’s new and old financial systems before signing up for a crypto bank account.
Supported cryptocurrencies
Finally, it makes sense to examine which cryptocurrencies are backed by a crypto bank before making it your primary banking platform. Every crypto friendly bank will have some sort of integration with bitcoin; However, you’ll probably have to do quite a bit of research if you’re more interested in some of the niche altcoins.
What makes a crypto friendly bank different from a traditional bank?
The main thing that separates a crypto friendly bank from the type of bank account you may already have is that a crypto-friendly bank doesn’t view Bitcoin and other cryptocurrencies negatively. In fact, these forward-thinking banks will either try to integrate cryptocurrencies directly into their online banking portals or have already done so. While some banks have indeed blocked Bitcoin-related transactions in the past, more banks are now taking a much more open approach to this new technology, integrating cryptocurrencies and traditional banking operations within the same interface.
Having trouble deciding which digital bank is best for you? Check out our popular comparison articles:
- SoFi vs M1 Finance
- Robinhood vs. SoFi
- M1 Finance vs Robinhood