300 community banks to offer bitcoin trading

Through a partnership with crypto custody firm NYDIG, a group of 300 community banks will let customers trade bitcoin on their mobile banking apps. The feature will go live in the second quarter, the banks said.

Why should we care?
While big banks might share their thoughts on fintech or crypto more vocally, they’re not the only ones affected by new players: Community banks have seen an outflow from customers’ accounts toward trading platforms like Coinbase. Given their relatively small size, it makes sense that smaller banks have banded together and espoused an “if you can’t beat them, join them” mentality. Through partnerships with select fintechs, community banks can both poach customers from established crypto trading platforms like Coinbase, and even potentially see a leg up against national banks that have been slower to adopt crypto. But while we should expect community banks to make more tech-based moves as an aggregate in the years to come, we could also see a sort of proxy war emerge between crypto trading platforms through community-bank partnerships. Last October, Tulsa, Oklahoma-based Vast Bank partnered with Coinbase—the very trading platform other local banks have identified as an outflow problem—to let Vast customers use their checking accounts for cryptocurrency purchases. Brad Scrivner, Vast’s CEO, said his bank has seen five times its historical retail base since the crypto launch, and now has customers in all 50 states and three U.S. territories. Clearly, small banks seem to understand crypto’s momentum. “While there remains significant uncertainty about the future of these assets, one thing is certain: They aren’t going away,” wrote Rob Nichols, CEO of the American Bankers Association.