It is no secret that traditional banks have been skeptical regarding the adoption of digital currencies. And if you are a bitcoin owner who wants to cash the money, you are probably looking for Bitcoin friendly banks. Some people might prefer using P2P exchanges like LocalBitcoins that pairs your location with someone who wants to buy bitcoin in cash in the area nearby. While others prefer using US banks that accept bitcoin. But are there any large banks located in the USA that are cryptocurrency friendly?
It should be said that many banks don’t understand bitcoin and they are not business friendly when it comes to cryptocurrency. Banks view bitcoin and altcoins as industry disruptors, a potential market anchor, or both. Some in the banking industry have openly stated their dismissal of the digital currencies.
Additionally, many of the smaller banks and the online-based banks are actively supporting altcoin credit card purchases. Some, like Simple Bank, are taking things a step farther and allowing comingling of 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
Simple bank is one of the American most Bitcoin-friendly banks that collaborates with multiple Bitcoin exchange websites and permits direct buy-sell transaction for bitcoin.
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 say bitcoin. As such, to make this purchase, the case/dollars have to come from somewhere. One of the options available is to use a Bank Account. When you chose this option, USAA is one of the banks that supports this type of transaction.
- Goldman Sachs
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 bitcoin transactions very soon.
- Bank of America
Bank of America is the second-largest bank in the US and one of the most US-friendly bitcoin banks. The customers of these bank claim that it is easy to make bitcoin payments and there are not restrictions. You can deposit and cash out large sums over $20K and never have issues. Many bitcoin exchanges have been collaborating with the BoA for bank transfers when buying/selling bitcoin. Bank of America was even reviewing its bitcoin policy to allow customers to buy bitcoin with credit cards.
However, the bank has recently stopped allowing deals with Bitcoins. Bank-issued credit cards and lines of credit can no longer be used to buy bitcoin or any other altcoin. Depositors can still use their debit cards or bank transfers for purchases, though. And clients who still have investments in the Bitcoins Investment Trust can keep those. While those clients who have fee-based accounts will have to sell the holdings.
What banks are not friendly to bitcoin businesses anymore?
Maybe 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 fraught. 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… So 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 bitcoin transactions
- Crypto exchanges are becoming competitors of the traditional banking system and the 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 bitcoin with a bank account as the method of payment.
See also: Bitcoin friendly banks in the UK.