How to Find Banks that Accept Bitcoin
Banks that accept Bitcoin are increasingly difficult to find. Bitcoin ATM operators are forced to travel across state lines to fulfill their basic Bitcoin banking needs. Consumers are left searching for ways to convert their Bitcoin into cash. As the traditional banking system continues to throw up barriers for the Bitcoin industry, BankLine is working to provide a network of Bitcoin-friendly banks for kiosk owners.
The State of Bitcoin Banking
As of February 2018, Bitcoin is sitting at an estimated $300 billion market cap. The cryptocurrency reached an all-time high value of $18,674 per coin in December 2017, but has since dropped to just under $10,000. Bitcoin has been around since 2009, but it’s become a part of the mainstream financial discussion in the past few years. It’s explosion in value over the course of 2017 brought it to the attention of investors worldwide.
As Bitcoin gains traction, Bitcoin ATMs are popping up across America. A Bitcoin ATM can either be one-way, meaning that users put cash into the machine to buy Bitcoin, or two-way, where an individual can with buy Bitcoin with cash or sell Bitcoin and receive cash back from the transaction. There are an estimated 2,000 Bitcoin ATMs in the world with an average of 5 new kiosk opening every day. Bitcoin ATMs are currently outpacing traditional ATMs in growth. North America holds over 75% of the market share and the United States alone is home to over 1,330 machines and counting.
Bitcoin is a virtual currency, meaning it is decentralized and unregulated. There is no “middleman” in a Bitcoin transaction, instead the two parties work directly with each other to transfer funds. The transaction information is encrypted and stored on the blockchain. The only way to access your Bitcoins is through your personal identification key. Without this key, there is no way for you to access your coins.
How Bitcoin Is Pushing Banks to Innovate
The traditional financial system does not encourage innovation. Financial institutions are doing things the way they’ve been done for years. By nature, banks are risk averse and prone to stay the course rather than try new things. The explosion of Bitcoin and blockchain technology in recent years is forcing the banking community to reexamine their approach.
Blockchain technology is being adopted by key players across the financial sector. Most financial institutions recognize the power of blockchain for the transmission and storage of sensitive financial data. As data breaches occur with greater frequency, consumers and banks are more exposed than ever before. Blockchain solutions are helping both sides find secure and efficient solutions to their data management problems.
Another important distinction to note is that Bitcoin trades 24/7. There are no bank holidays in the world of cryptocurrency. The nonstop, global, and unregulated nature of Bitcoin is a direct challenge to the traditional banking environment. As consumers grow accustomed to mobile money transfer, convenient solutions, and rapid innovation, banks are going to have to re-evaluate their model.
Cryptocurrency Banking Trends
The rise of Bitcoin ATMs and increased regulatory scrutiny are two cryptocurrency banking trends to watch in the year ahead. In addition to these two trends, alternative lending startups are emerging to enable crypto-millionaires to liquify their wealth without divesting their digital assets. This group of people faces an unusual dilemma. They’ve made tons of money off of their Bitcoin investment, but they believe in the cryptocurrency and don’t want to sell off their coins.
These early Bitcoin investors have been struggling to find a way to use the wealth they’ve accumulated on the blockchain in the real world. Salt Lending, Sweetbridge, MoneyToken, and other new loan platforms are giving cryptocurrency traders a way to secure a cash loan using their cryptocurrency as collateral.
These loans are comparable to unsecured personal loans in their terms and APR rates. They don’t require credit checks or income verification and there are no fees for early repayment. For all of these reasons, they are attractive to Bitcoin millionaires looking to free up their funds without selling off their cryptocurrency assets. The wild fluctuations in Bitcoin’s value can hurt people who take out loans. For example, if the value if Bitcoin dips well below the loan amount, the loan holder may be forced to put up more Bitcoin as collateral or sell-off existing funds.
These crypto loans are also promoting financial inclusion by serving businesses that may traditionally have difficulty securing financing. By meeting the needs of underserved groups, these loans are broadening the banking landscape.
The Future of Bitcoin-Friendly Banks
There is a core need at the center of the Bitcoin industry: Bitcoin-friendly banks. Finding banks that accept Bitcoin business clients is not an easy task. For Bitcoin ATMs, a bank account is crucial to their operations. An ATM operator relies on a bank to rotate their working capital. When an ATM user deposits cash to purchase Bitcoin, the ATM operator needs to deposit this cash into the Bitcoin business bank account. If they operate a two-way ATM, they need a way to withdraw money from their bank account and transfer it to the ATM to replenish funds.
In addition to a Bitcoin bank, kiosk operators also need expert guidance on compliance issues. As regulations evolve and requirements change, a compliance team can help ensure that the ATM operator is ahead of the curve. This is especially important since any regulatory violations can result in fees, loss of a bank account, and business closure.
BankLine provides real Bitcoin business bank accounts and Bitcoin compliance services. Our team of Bitcoin industry veterans is available 24/7 to ensure that your ATM kiosk is operating efficiently. As Bitcoin continues to grow in popularity, partnering with BankLine ensures that you are poised to scale with the cryptocurrency. Questions? Give us a call to discuss how we can help your business grow. Ready to open an account? Fill out a form on our website and our team will start working right away.