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Bitcoin-Friendly Banks: Traditional Finance Muscles Its Way Into Crypto

2022-08-31 13:51:41

In recent years, as crypto investing increasingly goes mainstream, traditional financial institutions have started to jostle for a piece of the growing market. As a result, traditional banks including some of the world’s biggest financial corporations are starting to offer crypto-related services.

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5 Crypto-Friendly Banks Offering Bitcoin Bank Services

As the demand for crypto banking services grows, more traditional banks are beginning to offer Bitcoin banking and other crypto-related services. Here are five banks–some MNCs, some smaller institutions–that have started offering crypto banking services to their clients:

  1. JPMorgan Chase: One of the largest banks in the United States, it offers a Crypto USD account for institutional investors, which is a cash management account that allows investors to hold U.S. dollars and cryptocurrencies in one place. JPMorgan also offers all its wealth management clients access to bitcoin and other cryptocurrency funds, such as the Bitcoin Cash Trust and others.
  2. Goldman Sachs: The banking giant made headlines when it started offering the first Bitcoin-backed loan in April 2022. It also relaunched its cryptocurrency trading desk (previously shelved in 2019), dealing bitcoin futures and non-deliverable forwards for clients to trade Bitcoin’s future price.
  3. Morgan Stanley: According to a March 2022 report by CNBC, the investment management giant will be offering access to three Bitcoin funds for wealth management clients with at least $2 million in assets held at the bank. The decision was apparently taken after strong client demand for exposure to Bitcoin, according to an internal memo.
  4. Bank of New York Mellon: In 2021, the bank announced that it would hold, transfer and issue Bitcoin for asset management clients, Clients will be able to store bitcoin and ether in BNY Mellon crypto wallets. In April 2022, it was announced that BNY Mellon was selected to be the custodian for Circle’s USDC stablecoin reserves, expanding the bank’s footprint in crypto significantly.
  5. Vast Bank: The 24th largest bank in the state of Oklahoma is a crypto-friendly bank that offers customers a checking and a crypto bank account. It was also the first chartered bank in the US to provide Bitcoin bank accounts to customers, via which they can buy, sell and store Bitcoin on their mobile banking app.

Crypto-Friendly Banks vs Traditional Banks

Crypto-friendly banks are traditional banks that offer services and facilities involving the purchase, deposit, investment and trading of cryptocurrencies. These are usually integrated into the core banking portal or platform. These are typically banks that have received strong demand from their existing customers for crypto banking services–as well as those that want a slice of the fast-growing crypto pie.

Traditional banks generally do not offer any form of services involving cryptocurrency. However, as customer awareness about Bitcoin and other cryptocurrencies grows, it is likely that it will be a matter of time before more traditional banks start offering crypto banking services.

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What Is a Crypto Bank?

A crypto bank, also known as a digital bank sometimes, is a new breed of “challenger” bank that offers banking services to crypto investors. Unlike traditional banks, which only deal in fiat currencies, crypto banks focus on digital assets i.e. cryptocurrencies. Crypto banks provide a variety of services that are tailored to the needs of crypto investors, which can include savings accounts, merchant processing, checking accounts and custody services, explained in detail below.

3 Popular Crypto Banks

High-yield Bitcoin savings account: Juno

A digital bank with a mission to build a “gateway to crypto and web3,” Juno enables customers to buy, sell and store crypto directly starting from $1, as well as receive their paycheck in crypto. It is popular for its low fees and high interest rates–up to 6% annually on BTC and ETH in the Juno Wallet. Customers who use their Juno debit card to make a purchase with crypto will also earn 10% in cashback.

Integrated crypto bank account: Ally Bank

While Ally Bank does not enable customers to buy or sell Bitcoin and other cryptos directly through their online banking app, it is integrated with a crypto exchange, giving customers a seamless experience of buying crypto using their Ally Bank debit or credit card. Customers can also invest in crypto-holding funds such as Grayscale Bitcoin Trust (GBTC) via Ally Bank.

Crypto checking account and Bitcoin rewards: Quontic Bank

A New York-based, FDIC-insured digital bank, Quontic Bank offers customers 1.5% cashback in Bitcoin instead of fiat on every eligible debit card purchase. This allows customers to earn crypto and accumulate interest on the crypto rewards they store in their checking accounts. It has a strong lineup of rates and other features on its checking, savings, money market accounts and certificates of deposit.

Read: Can I withdraw Bitcoin to my bank account?

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Types of Crypto Banking Services

  • Crypto merchant processing: Allows businesses to accept crypto as payment. This is a convenient way for businesses to tap into the growing number of crypto investors. Crypto merchant processing usually comes with lower fees than traditional merchant processing and offers faster transaction times.
  • Crypto interest accounts: The crypto equivalent of a savings account, where investors can earn interest on their crypto assets. The crypto is stored in a cold storage wallet, a secure offline storage option that minimizes the risk of theft or loss. Crypto interest accounts are a safe and convenient way to store crypto, and offer higher interest rates than traditional savings accounts.
  • Crypto checking accounts: Similar to traditional checking accounts, but these allow investors to hold and use crypto assets. Crypto checking accounts also offer features like debit cards and direct deposit, making it easy and convenient to use crypto for everyday purchases. One great perk of crypto checking accounts is that they often have little to no monthly fees.
  • Crypto custody services: Crypto banks offer safe storage for crypto assets. This is similar to the way traditional banks offer safe storage for fiat currency and other assets. Crypto custody services usually come with a higher price tag than traditional banking services, but they offer peace of mind for investors who want to ensure that their assets are safe. Crypto custody services often include features like insurance, which protects investors in the event that their assets are lost or stolen.
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Crypto Firms Offering Banking Services

Just as traditional banks are getting into the crypto space, crypto firms are offering banking services, most commonly in the form of borrowing, lending and savings. These include:

  • Crypto exchanges like Phemex offer programs such as Phemex Earn and Phemex Savings which enable customers to earn higher interest in both fixed and flexible savings on their funds as compared to traditional bank savings accounts.
  • Lending and borrowing protocols like Nexo offer crypto-backed loans where customers can use their crypto as collateral to take out a loan in fiat currency. Customers can also use their crypto holdings as collateral to take out a loan in fiat currency.
  • Crypto custody services such as BitGo also offer crypto banking products such as crypto savings accounts. These custody services allow institutional investors to store their crypto holdings in a safe and secure way.

Note: Crypto lending programs are not without risks. Read our article on the risks of depositing your funds with crypto lending firms.


The volatility of cryptocurrencies has been a challenge for many traditional banks even as they try to navigate the strange new world of crypto. It is especially tricky, as banks must comply with a variety of regulations when offering products and services, and crypto banking may not fall within the purview of these regulations.

At the same time, startup crypto banks often don’t have the same resources as the traditional banks. As a result, some of them have chosen to partner with established industry leaders in order to offer their products and services–and this will likely be the approach that needs to be taken in order to drive crypto adoption to the next level: a partnership between the legacy institutions and new generation of fintech startups.

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