Not all banks are the same, and there are three distinct types of crypto banks that can be identified. The first type is crypto-friendly banks, which are traditional banks that tolerate and do not cause trouble for those involved in crypto markets. While many traditional banks are hostile towards customers operating in crypto markets, truly crypto-friendly banks explicitly allow their customers to freely trade in crypto markets. PayPal is a benchmark example of a crypto-friendly bank that has integrated cryptocurrency buying and selling services.
The next type is true crypto banks, which not only tolerate but also offer crypto services to their customers. PayPal falls under this category as well, as it has integrated both crypto buying and selling services and crypto deposits and withdrawals. However, there are still very few true crypto banks in the world, and traditional banks need to form partnerships with crypto companies to offer these services.
Fintech banks, on the other hand, serve as an intermediate level between traditional banks and true crypto banks. These online-based banks, such as Revolut, are often also crypto-friendly and have the advantage of pushing the industry to evolve due to their predominantly online business model. Fintech banks cater to a target audience interested in crypto markets and may eventually start offering crypto services themselves.
Lastly, there are crypto exchanges that add banking services. While major exchanges like Kraken and Coinbase are evolving towards becoming fully regulated financial institutions that offer banking services, traditional banks need to quickly integrate crypto services for their customers to avoid competition from these exchanges. However, finding reliable partners who meet banking regulations can be challenging for traditional banks.
In conclusion, while there are different types of crypto banks, true crypto banks have the power to bring the cryptocurrency revolution into the mainstream financial system. It may take several years for this revolution to occur, but fintech banks play a significant role in pushing the industry forward. As for traditional banks, they must adapt quickly or risk being overshadowed by evolving crypto exchanges.
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