The latest media report has highlighted that a group of 300 small-level banks is planning to start offering Bitcoin custodial services to their clients during the current year. The news has become the center of speculation and discussion among the members of the crypto community on social media platforms.
The news was shared by the American Banker analytics report first. The banks that are planning to offer Bitcoin trading services will be partnering with NYDIG or the New York Digital Investment Group (NYDIG). NYDIG is an investment, custodial, and execution services provider operating as a subsidiary of Stone Ridge Asset Management. The plan was first proposed in July last year and will go live in 2022.
The American Banker reporters talked to the spokesperson of the 300 community banks that are planning to offer Bitcoin trading this year. The banks have claimed that the partnership formalities are taken care of, and the security concerns are addressed already. For many financial investors, traditional banks planning to offer Bitcoin trading sounds like an unlikely occurrence.
However, the banks have postulated that the management decided to be able to stay afloat during critical economic times. Harold Reynolds, an executive from the BankSouth, claimed that the financial organization is anticipating a massive increase in crypto trading during the current fiscal year.
Zach Bishop is Managing Director at one of the banks operating under the wing of Synovus Group. Bishop added that cryptocurrencies have started to take up the role of an important financial instrument among their clients. Synovus Bank is a small banking enterprise operating out of Georgia that is working on adding Bitcoin to its mobile banking application.
The Fidelity National Services or FIS signed a contract with NYDIG last year in May to allow banks to offer Bitcoin services. To secure the crypto reserves of their clients, these small banking organizations hire third-party crypto exchange services that use cold storage addresses to avoid the risk of any hacks. Fiserv is one of the biggest crypto organizations to work in tandem with NYDIG for offering credit unions and banking enterprises to offer Bitcoin services to their clients.