The full-page ad in The Wall Street Journal was hard to ignore with its eye-catching headline: “Bitcoin For The People.” In a few simple sentences, a team of financial services organizations including payment giant NCR announced a partnership that would soon enable consumers to access Bitcoin through their banks and credit unions.
More than 650 financial institutions, to be exact. Representing more than 24 million consumers, who will have the opportunity to access crypto trading through their banking apps. New York Digital Investment Group or NYDIG, a digital asset management firm, will provide custody services, effectively bypassing potential regulatory issues for the participating financial groups.
The news comes at a particularly soft moment in the Bitcoin cycle, as the world’s first digital currency continues to slowly move toward a recovery from its massive price plunge in May.
That makes the announcement all the more intriguing as these savvy financial organizations — including $6Billion giant NCR — and their leadership are letting the market know that Bitcoin is here to stay.
“Interest in cryptocurrency, and particularly bitcoin, has skyrocketed over the past several years, to the point that bitcoin investing is now a commonplace activity,” said Byron Vielehr, chief digital and data officer at Fiserv, one of the partners in the project. “People continue to turn to financial institutions as a central place to manage their financial activity, and being able to offer this capability will help position banks and credit unions at the forefront of their customers’ financial lives.”
Through the new partnership, consumers will be able to buy, sell and hold Bitcoin using their current financial institution’s online portal and mobile app. The announcement even hinted at a Bitcoin-based rewards program.
Of course, there’s another benefit of making Bitcoin available through these mainstream institutions. And it’s not for the consumer.
“This will enable banks and credit unions to meet growing mainstream interest in bitcoin, retain and grow their customer base, and increase non-interest income opportunities,” NYDIG said in its press announcement.
“Non-interest income opportunities” are fees. Which will be charged to consumers. And could very well be the impetus for this major announcement.
In fact, Yan Zhao, NYDIG president and cofounder of asset management firm Stone Ridge, told Forbes that banks said one of the largest outflows of money came from consumers moving money to exchanges where they could purchase Bitcoin.
Which brings us full circle to the very premise behind the creation of Bitcoin, which was to create a decentralized peer-to-peer electronic cash exchange system that bypassed the need for third-party organizations like banks and credit unions. Which generate tremendous income from fees. Which is what prompted the rise of crypto exchanges where traders could decide how much they’re willing to pay for a trade.
So what really is Bitcoin For the People? Is it countries such as El Salvador adopting Bitcoin as a currency? Is it the fact that more companies are accepting Bitcoin in exchange for goods and services? Is it the ability for retail traders to freely manage their digital assets through exchanges and not a third-party financial institution?
Or is it, as the Journal ad said, giving hundreds of millions of (traditional banking) customers “easy access through America’s financial institutions.”
As on-chain analyst Willy Woo tweeted this week, “#Bitcoin is banking for the unbanked.”
Well said, Willy, as we the crypto people celebrate the financial independence offered through the digital currency world.
Originally published at https://www.stex.com on July 5, 2021.