Banking has taken a significant turn toward the digital world. From mobile deposits to peer-to-peer payments, customers expect to go online and do their banking as if they trekked to a branch. However, digital growth hasn’t stopped with information and transactions. Today customers and institutions alike are curious about open-source digital currency.
Chief among the digital currency revolution is Bitcoin. While the currency has gotten a lot of press over the past couple of years, there are still questions and concerns about it. So in our October webinar, we turned to digital currency expert Tammy Bangs, Relationship Manager Banking Solutions of New York Digital Investment Group (NYDIG), to talk a bit about the history, risks, and rewards of Bitcoin.
A Brief Bitcoin History
First discussed in a whitepaper in 2008 and mined in 2009, Bitcoin has a long history. Its first transaction was in 2010 when a pizza was purchased in Florida. Since then, there have been more than 645 million transactions. However, it is still thought of as a “new” and confusing currency by many consumers.
According to a survey by NYDIG, about 78% of Americans do not own bitcoin. However, 51% of those that don’t own Bitcoin are interested in learning more about it and are turning to financial institutions for that information.
For many, that information about handling of cryptocurrencies has come from FinTech companies such as PayPal and Square instead of more traditional financial institutions. And even though The Basel Committee on Banking Supervision announced in July that conventional banks would be allowed to hold Bitcoin or other cryptocurrencies, some smaller institutions have been hesitant to dip their toes into digital currency due to stringent capital requirements, a lack of knowledge, and limited people resources to take on more duties.
The Business Case for Banks and Bitcoin
There is, though, demand and business reasons for traditional institutions to get involved in bitcoin:
- 22% of American Adults own Bitcoin
- 80% of bitcoin holders would switch FIs for one that offered bitcoin products
- 71% of Bitcoin holders would choose to store it with their FI if offered
Bang told the attendees that there is another good reason for traditional financial institutions such as credit unions and local banks to dive into the Bitcoin waters--non-interest income via transaction fees.
Much like how Info-Pro helps financial institutions manage their tax monitoring, NYDIG comes into the picture for credit unions and banks to help them with Bitcoin management.
NYDIG offers a regulated, audited private key system, so Bitcoin never touches the financial institution’s balance sheet but sees the transaction fees for its customers passed along to the bank.
Some of the benefits of working with NYDIG:
- A diverse range of bitcoin products and services via APIs
- A unique regulatory solution to de-risk offering
- Co-branded research and education materials
- Leading regulatory/compliance advisors to support partners
Consumers are increasingly interested in Bitcoin and are looking for information from experts. Your institution can become that expert source with the help of those that already know the ins and outs of Bitcoin.
Info-Pro takes “the complex” and makes it easy. We collect and integrate data from the 26,000+ property tax authorities nationwide into a user-friendly software platform, enabling community banks to easily identify property tax delinquencies and pay escrow taxes.
Contact us today to learn more about the benefits of outsourcing property tax monitoring and/or escrow processing.
