NYDIG 'Making it Simple' To Buy BTC From U.S. Banks
2 min read
New York Digital Investment Group (NYDIG) has partnered with fintech giant Fidelity National Information Services (FIS) to enable U.S. banks to offer their clients the ability to buy, sell and hold BTC through their existing accounts. The two firms expect that this “industry-first” solution will be available in the coming months.
“What we’re doing is making it simple for everyday Americans and corporations to be able to buy BTC through their existing bank relationships,” Patrick Sells, head of bank solutions at NYDIG, told CNBC.
Very excited to announce our partnership with @FISGlobal as #BTC becomes more integrated with banking services. Our collective solution will help bridge the gap in accessibility to BTC. https://t.co/uLikvkbRvL pic.twitter.com/g0sciBLC68
— NYDIG (@NYDIG_BTC) May 5, 2021
The partnership will see FIS provide a user-friendly interface for BTC trading services through its Digital One mobile app, while NYDIG, a subsidiary of New York-based asset manager Stone Ridge, will take care of custody and trade execution. Additionally, FIS Ventures, the venture arm of FIS, has invested an undisclosed amount into NYDIG.
From exchanges to banks
Currently, those Americans who want to purchase BTC can do so via cryptocurrency exchanges like Coinbase or Kraken, crypto apps such as Robinhood and Square, and—most recently—through PayPal.
While traditional banks have yet to offer BTC-enabled services to their customers, the situation is changing, with financial institutions beginning to explore the possibility of adding cryptocurrency services for their clients.
According to Yan Zhao, president of NYDIG, banks are seeing their customers sending large amounts to cryptocurrency exchanges and want a share of the pie.
“This is not just the banks thinking that their clients want BTC, they’re saying ‘We need to do this, because we see the data’,” said Zhao.
Another problem, says Zhao, is that big banks are mainly focused on institutional investors, limiting access to crypto for retail customers. Last month, Morgan Stanley said it would allow certain mutual funds to invest “indirectly” in BTC through cash-settled BTC futures and the Grayscale BTC Trust, while multinational investment bank Goldman Sachs is reportedly looking to offer BTC and other digital assets to its clients in the coming months.
“Most people can’t invest in things that institutional investors get to invest in,” Zhao said. “With BTC available through your bank to be purchased with as little as $1, now you have an attractive asset that’s available to be owned by anyone in any amount.”
Currently, NYDIG is in discussions with several major U.S. banks. However, as detailed by Sells, hundreds of smaller banks across the country are already enrolled in the program. One of them is Suncrest, a California-based community bank with just seven branches.
NYDIG’s other plans include the launch of debit card rewards paid in BTC, as well as a new type of FDIC insured bank account that would pay interest in cryptocurrency.
