Traditional banks, for the most part, have been skeptical regarding digital currencies. If you are a Bitcoin owner who wants to exchange your coins for fiat currency, you are probably looking for a Bitcoin-friendly bank. Some people might prefer using P2P exchanges, like LocalBitcoins, that match a buyer with a seller, in the same vicinity. Others prefer using a bank that accepts Bitcoin. But are there any large banks located in the USA that are Bitcoin-friendly?
It should be said that many banks are simply not friendly when it comes to your cryptocurrency needs. Banks view Bitcoin, and altcoins, as industry disrupters, market anchors, or both. Some banking industry spokesmen have openly stated their dismissal of digital currencies.
Many of the smaller banks, and the online-based banks, on the other hand, are actively supporting cryptocurrency credit card purchases. Some, like Simple Bank, are taking things even further, and allow their customers to commingle exchange and wallet features.
What Banks are Friendly to Bitcoin Businesses?
If you are worried that your bank may close your account due to making bitcoin payments, here are the banks friendly to bitcoin transactions in the US.
Simple bank is the best bank for Bitcoin that collaborates with multiple Bitcoin exchange websites and permits direct buy-sell transactions for BTC.
In contrast with traditional consumer banks, Simple has no physical branches. Instead, account-holders are issued Visa debit cards and have access to an online banking system accessible through Simple.com or mobile apps for Android or iOS.
USAA is Coinbase-friendly and it allows Coinbase users to check their bitcoin balances from their apps and have invested in the exchange. This marks the first major bank to invest in an exchange.
Coinbase is a website where you can buy/sell cryptocurrencies (e.g. Bitcoin). When buying cryptocurrencies, you are exchanging cash/dollars for cryptocurrency (i.e. bitcoin). As such, to make this purchase, the cash/dollars have to come from somewhere. One of the options available is to use a Bank Account. When you choose this option, USAA is one of the banks that supports this type of transaction.
Most big banks have tried to stay far away from the scandal-tainted virtual currency Bitcoin. But Goldman Sachs, perhaps the most storied name in finance, is bucking the risks and moving ahead with plans to set up what appears to be the first Bitcoin trading operation at a Wall Street bank. Goldman Sachs has announced that it will launch an altcoin trading desk and will offer altcoin products in 2018. Just wait a bit and you might be able to use this bank for your BTC transactions very soon.
Ally bank is one of the most Bitcoin-friendly banks. Ally is an online only bank, meaning it has no brick and mortar locations. But they have 24/7 support as well as an online chat feature that has very short wait times (usually 2-5mins). You can easily link your bank account to Coinbase and buy desired coins with your debit card. You can also try buying crypto with your credit cards, as Ally hasn’t announced they are against it, but then you will end up paying the fees.
This bank has really attractive plans to start your banking with them and there are positive reviews from their clients who also purchased coins and had no issues.
Do Banks Accept Bitcoin?
Currently, no banks accept Bitcoins in its form. They trade/transact in government-backed fiat currencies only.
Although Bitcoin is a legal payment tender in some countries. Your traditional banks do not directly deal with Bitcoin. There might be some intermediary who converts Bitcoin to local currency and vice versa (i.e. crypto exchanges).
Secondly, cryptocurrency is against the concept of centralized authority in charge of your money. If you need a bank to park your money, you do not need Bitcoin.
If you need a bank to manage your money, there isn’t any base to owning bitcoin. The first agenda of bitcoin and cryptocurrencies were to abolish the intermediary authority like banks, payment gateways, and the government tax regulations.
Do Banks Accept Bitcoin:
1) Any bank that has safe deposit boxes could “accept bitcoin” into a safe deposit box, as what makes bitcoin able to be controlled and “possessed” is the ability to maintain the secret key to a wallet address. So, whether the key is printed on a physical medium (“paper wallet”) or on a USB memory stick or another form of digital storage, the secret key could be stored in a bank’s safe deposit box (for what is called “cold storage” i.e. offline storage).
2) There are businesses that exist in order to facilitate the purchase of bitcoin with fiat currencies like Coinbase, Binance, Gemini, etc. These organizations are registered with all the pertinent regulatory financial authorities in the United States.
It is probably inevitable that the financial systems in place today will (eventually) become better equipped to handle and process transactions, exchanges, and storage of digital/cryptographic currencies. However, we are very much still in the early stages of this technology, so there are going to be obstacles and stumbles along the way.
What banks are not friendly to bitcoin businesses anymore?
Perhaps you heard that major banks in the U.S., the United Kingdom, and Australia have all signed on to banning credit card purchases for altcoins. The relationship between banks and bitcoin has grown cold.
We cannot call them unfriendly, but be aware that banks such as JPMorgan Chase, Bank of America and Citigroup have all banned the purchase of bitcoins on their credit cards, and Capital One and Discover, but wire transfers have worked great so far. Be careful with your banking transfers when you decide to buy more crypto coins.
To Sum Up
When Bitcoin prices rose up dramatically, it made some big banks worry due to the following reasons:
- Bitcoins are anonymous and decentralized
- Banks are not needed for BTC transactions
- Crypto exchanges are becoming competitors of the traditional banking system and bank profits may decrease.
However, despite all the rumors and stereotypes that cryptocurrencies are a threat to banks, Bitcoin-friendly banks are getting more and more common enabling people buying BTC with a bank account as a method of payment.
See also: Bitcoin friendly banks in the UK