Are banks Bitcoin-friendly?

Banks may use Bitcoin in various ways, but it is not yet a widely adopted technology in the banking industry. Some banks and financial institutions have begun to explore the use of blockchain technology, which underlies Bitcoin, for purposes such as improving payment systems, reducing fraud, and streamlining back-office operations. However, most banks have been cautious about adopting Bitcoin as a currency due to its volatility, regulatory uncertainty, and operation outside of traditional financial systems. In addition, Bitcoin's decentralized nature and lack of a central authority make it difficult for banks to control or regulate its use.

That being said, some banks and financial institutions have begun to offer Bitcoin-related services, such as custody and trading. These services may be provided through partnerships with third-party cryptocurrency exchanges or other service providers. Some banks are more "Bitcoin-friendly" than others.

One example is the Swiss bank Sygnum, which has been licensed by the Swiss Financial Market Supervisory Authority (FINMA) to provide custody and trading services for cryptocurrencies, including Bitcoin. Another example is the US-based bank Silvergate, which has a significant presence in the cryptocurrency industry and offers banking services to many cryptocurrency-related companies. In addition, there are a number of cryptocurrency-focused banks and financial institutions, such as Kraken Bank, Avanti Bank & Trust, and Anchorage Digital Bank, that offer services specifically tailored to the needs of cryptocurrency users and investors.

It is not common for banks to recommend diversifying a portfolio with Bitcoin or other cryptocurrencies. Banks typically recommend a diversified portfolio that includes a mix of traditional assets, such as stocks, bonds, and mutual funds, in order to manage risk and achieve long-term financial goals. But, for example, in 2021, Morgan Stanley, one of the largest banks in the US, became the first big US bank to offer its wealthy clients access to bitcoin funds. The bank's wealth management division will give its clients access to three bitcoin funds, two from Galaxy Digital and one from NYDIG, according to an internal memo. Morgan Stanley will require investors to have at least $2 million in assets held by the bank to qualify for the bitcoin funds. The move signals a further shift towards the mainstream adoption of cryptocurrencies by institutional investors.

Overall, while the use of Bitcoin by banks is still limited, it is possible that we may see greater adoption of blockchain technology and cryptocurrencies by the banking industry in the future.

If you're wondering about the legality of using Bitcoin, see Is Bitcoin legal?

The article does not contribute financial advice.

Start with crypto today

Sign up on NBX, a trusted Norwegian cryptocurrency exchange and custodian, and kickstart your crypto journey safely.
Crypto 101
Explore the most popular crypto terms and find answers to your questions.

What is FOMO?

Read

Can you buy 10$ worth of Bitcoin?

Read

What is penetration testing?

Read

What is Cardano?

Read

What is Chainlink?

Read

What is Binance USD?

Read

What is USD Coin?

Read

What is a meme coin?

Read

What is an ASIC miner?

Read
Blog

Insights, Trends, Analysis

Unraveling the cryptocurrency industry revolution.
#crypto101

Previous bull runs and hypes

Each bull run in crypto brings new projects and hype to the crypto sphere.
3 minutes
2023-12-01
#crypto101

Week 46 in review: Dogecoin (Doge)

The week in review: Dogecoin (Doge) week 46 - 13th to 19th of Nov - NBX report.
2 minutes
2023-11-23
#crypto101

Week 46 in review: Ethereum (ETH)

The week in review: Ethereum (ETH) week 46 - 13th to 19th of Nov - NBX report.
2 minutes
2023-11-21
Cookie Consent

By clicking “Accept”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.