The first time Bitcoin entered into the market, everyone thought the cryptocurrency industry will eventually take over the traditional banking system. Even though the digital currency market has become more mainstream and it is worth billions in valuation. Cryptocurrency exchanges and many other brokerage services are now looking for ways to purchase shares in banks as well as turn into banks themselves.
Cryptocurrency Exchanges Turning Into Banks?
Back in the days, many financial institutions distrusted cryptocurrencies, but with the growth of the cryptocurrency market, it’s difficult to ignore the industry. In fact, some exchanges are beginning to buy into banks or become banks themselves. For example, Coinbase is expanding its services as it makes more money from the cryptocurrency industry. Some people believe that Coinbase will eventually become a big cryptocurrency bank.
Already, Coinbase has over 20 million active users that have traded over $150 billion worth of cryptocurrencies since the company was founded. In May, the public discovered that Coinbase was exploring a federal banking charter as well as other banking licenses. Their meetings with United States regulators is no news either.
Bitcoin (BTC) Price Today – BTC / USD
The most recent report, detailed that Coinbase had sent representatives to the United States OCC, (Comptroller of the Currency) earlier in the year. While the firm didn’t comment on the reason for the meeting, they made a statement about the importance of dealing closely with officials from the government to get the right licenses. By securing a Federal Banking Charter, the cryptocurrency exchange will be able to offer many banking services.
Binance, another large cryptocurrency exchange, is also making plans to launch a community-owned decentralized bank. The firm recently purchased 5% of the stake in Founders Bank, a financial institution. According to Binance, the bank is based in Malta and it uses the blockchain technology and cryptocurrency tokens. The junior minister of innovation, financial services, and digital economy in Malta, Silvio Schembri, said:
“Malta is honored to be the location of the first global community-owned bank.”
Many other cryptocurrency exchanges are doing similar things. Whether or not these cryptocurrency banks will eventually render the current traditional banking system useless is unclear.