A report by Bloomberg indicates that the US crypto market is having difficulty getting banking services due to various factors. Banks have been hesitant to work with cryptocurrency customers. Recent events such as the closing of Silvergate Capital Corp. and the seizure of Signature Bank Regulations have made financial institutions more cautious when providing services to the sector.
The report reveals that while there is not a full-scale ban on crypto clients, financial institutions are imposing restrictions. Applications submitted by smaller companies and retail platforms can be declined. In some cases, the door may be closed to all crypto businesses.
Will The Crypto Market Overcome This Challenge?
After the failure of Silicon Valley Bank (SVB) Signature Bank, Cross River Bank has reportedly received over 100 requests for safe deposit options. Nevertheless, the majority of these requests were rejected by the bank, which only considered existing relationships. A spokesperson for the fintech industry spoke out about the situation to Bloomberg.
The increasing hesitation by financial institutions when serving the cryptocurrency market is becoming increasingly evident. Some banks are even refusing to accept non-crypto companies looking for safe places to deposit their funds. This makes it difficult for crypto companies to find reliable banking services, further magnifying the struggles of operating within a highly regulated environment.
Cross River Bank, a privately-held company based in Fort Lee, New Jersey, has accepted crypto companies, including stablecoin issuers, according to some reports. Circle Internet Financial Ltd, which has broadened its partnership with Cross River after the collapse of SVB.
No Clear Picture Ahead For The Crypto Sector
The report was compiled by JPMorgan, one of the world’s largest banks. Chase And the Bank Of New York MellonCrypto firms are open to doing business selectively. The onboarding process with these institutions is possible. “quite lengthy,” Up to six months Bobby ZagottaCEO of Bitstamp Submitted Bloomberg. He Additional claims:
There are other alternatives that are small that could emerge as a next evolution of this kind of payments space, but it’s absolutely unclear to me who that might be, and based on what. From our conversations with our customers, we haven’t heard anyone who has a clear picture.
OverallAccess to banking services is a major problem in the crypto sector as it hampers companies’ ability to grow and expand their businesses.
The The industry calls for more regulatory clarity and assistance to encourage the growth and development of cryptocurrency industries, such as the case of Coinbase It has taken various steps to seek a regulatory structure that will allow the crypto market to offer services in the US, and continue its growth.