Quontic, a small New York-based bank has opened its doors to crypto companies. In so doing, the bank has joined a growing group of US financial institutions that support the crypto sector. A report unveiled this information on August 9 noting that the bank made this move several weeks ago.
Per the report, the bank opened a checking account for a bitcoin ATM firm. However, the bank did not disclose the name of the firm, which is its first crypto client. Also, the bank unveiled that it is almost concluding a new deal to deliver banking services to another crypto startup. According to the bank’s CEO, Steven Schnall, this contract has the potential to impact millions of Americans.
The bank hopes that entering the space early will give it a competitive edge when crypto regulation becomes clearer.
Quontic’s CEO, Steven Schnall noted,
We’re just taking steps so that when the regulatory environment becomes more crypto-friendly, we don’t have a lot of catching up to do. We’re looking to diversify our product offering and our customer mix by entering into that field.
US-based Banks Continue Avoiding the Crypto Sector
This news comes as the majority of banks in the US and other jurisdictions continue avoiding crypto. This is because they have to put in a lot of work to comply with KYC and AML policies.
While Quontic has opened its doors to crypto firms, the bank has set high standards for its customers. Before making a deal with any firm, the bank vets it to ensure it meets the required compliance standards.
Commenting on this, Schnall said,
You don’t have mom-and-pop financial institutions. You’re not going to have mom-and-pop crypto players of any significance. Crypto companies have to have strong controls, internal audit, and a very robust system of compliance.
There must also be a strong strategic motivation for us as well – such as meaningful deposit balances, etc. ‘Meaningful’ is relative to how complex, risk-laden and labor-intensive the account will be.
At the moment, only a handful of US banks are willing to serve the crypto space. These include New York-based Signature and Metropolitan Commercial and California-based Silvergate.
Compared to the above banks, Quontic is relatively small. The bank has $420 million in assets, making it 0.015 percent the size of JP Morgan, which has $30 million in assets.
Prior to this news, a publication revealed that a lot of crypto companies were facing hardships in their quests to find banking partners. Also, several banks banned the purchase of crypto through their credit cards. These include but not limited to the Bank of America, JP Morgan and Capital One.
Do you Quontic’s decision to offer banking services to crypto firms will help it grow in size? Let us know in the comments below.