The traditional financial world has had a rocky relationship with cryptocurrency-related businesses. That's to be expected, as crypto and blockchain technology could potentially disrupt a huge swath of the current global financial system.
But some forward-thinking financial companies are willing to provide much-needed services to this fast-growing industry. Read on to learn more about one bank that could enjoy a massive inflow of deposits thanks to its new crypto-related services, as well as a fintech company seeking to use ATMs to bing crypto to the masses.
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Provident wants to be the crypto industry's bank
The Provident Bank is now offering deposit services for cryptocurrency-related businesses. The Massachusetts-based commercial bank, which is a subsidiary of Provident Bancorp, Inc. (PVBC), has become one of a select few U.S. banks to offer banking services to cryptoasset companies and investors.
"The Provident Bank is proud to be entering the digital asset space because it's largely unbanked and clients want deposit services," CEO Dave Mansfield said in a press release. "The Provident team developed robust measures to ensure our strategy will not only be effective from a regulatory compliance perspective, but will also allow for our clients to have certainty in a long-term banking relationship."
Provident will use Bitfury's Crystal Blockchain analytics platform for client onboarding and anti-money laundering (AML) transaction monitoring. "The cryptocurrency and blockchain industries represent a growing sector that is increasingly important as companies adopt digital assets," Crystal Blockchain CEO Marina Khaustova said. "We are honored to be partnering with The Provident Bank to extend banking services and compliance platforms to this industry through the use of our leading compliance and AML platform."
Notably, Provident's customer deposits will be insured in full thanks to the bank's affiliation with the Depositors Insurance Fund, which is available only to mutual savings banks chartered in Massachusetts. The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000, and the Depositors Insurance Fund insures the rest, "down to the last penny."
Access to legitimate banking services has been a major challenge for crypto companies for most of the past decade. The ability to access insured deposit services and other banking solutions offered by the likes of Provident Bancorp should help to further legitimize the crypto industry -- and fuel its growth.
You may soon be able to buy Bitcoin at your local ATM
While Provident wants to bring banking to the crypto world, Coinsquare wants to bring crypto to ATMs.
The Canada-based cryptocurrency trading platform obtained a controlling investment stake in Just Cash, a financial technology software provider. Just Cash's software enables any ATM to sell cryptocurrency -- such as Bitcoin and Ethereum -- to customers via debit card transactions. The feature can be added to ATMs via a routine software update and requires no additional hardware. Moreover, Coinsquare says users will be able to "buy cryptocurrency through the safe, familiar, and trusted process of an ATM transaction."
"Right now, there is a lack of mainstream cryptocurrency adoption because most people are intimidated by the process to acquire it," Coinsquare CEO Cole Diamond said in a press release. "By using the millions of existing ATMs around the world, we can now bridge the gap and give new users the easiest and most familiar experience to purchase cryptocurrency."
Diamond went on to state that the company intends to use ATMs to help cryptocurrency "finally reach the masses."
"We're excited to join forces with Coinsquare and work toward enabling millions of ATMs with our software," Just Cash managing partner Todd Lawrence said. "Coinsquare is the largest cryptocurrency company in Canada, so it made sense to leverage each other's expertise and work together to bring our solution to millions of users around the world."
Coinsquare expects to roll out the software to roughly 170,000 non-bank ATMs in nearly every U.S. state by the end of 2020, according to CoinDesk.
The ability to purchase cryptocurrency at thousands of ATMs across the country could certainly make it easier for people to acquire digital assets, particularly for those who are either unable or unwilling to purchase them on exchanges. As such, a nationwide rollout of Coinsquare's new ATM software could be another step toward mainstream crypto adoption.