Quontic, a New York-based digital bank.
So far, hundreds of banks have expressed interest in implementing the services.. They are encouraged by the fact that there is no need to change their IT systems, as, like other fintech services, the solution will be API-based. This means the banks will never hold bitcoin on their balance sheet and won’t face security headaches.
Simply put, NYDIG will handle the bitcoin part (custodial and trading platform), FIS will handle the technical part (in-app seamless connection to bitcoin custodial and services), and allthat is left for banks is to decide whether they want to expand their services and collect the extra revenue.
Bitcoin and banks: the unlikely allies in the low interest rate environment
The main question is if US banks will choose to expand their service portfolio.
Despite the value of Bitcoin cooling in recent days, new crypto partnerships just keep coming.
FIS “expertise and industry know-how will help us simplify our business operations and help us seamlessly introduce virtual and physical cards to our customers,” CEX.IO Executive Director Konstantin Anissimov said in the release regarding the latest FIS cooperation.
On the same day as the FIS-CEX.IO release, FIS President Bruce Lowthers underscored the FIS interest in cryptos when he spoke at a financial conference hosted by British bank Barclays. “We’ll be well-positioned to handle (cryptocurrencies) across the whole ecosystem in the marketplace,” Lowthers said.
While federal bodies across the world are contemplating ways to regulate digital assets and cryptocurrencies, mainstream banks and fintech companies are focused on introducing fee-based crypto-related services for bitcoin investment. Fidelity National Information Services (FIS), an American Fortune 500 fintech company listed on the New York Stock Exchange, is the latest to launch a Bitcoin investment service, according to their press release in the first week of May.
The service will be available to Fidelity’s core banking clients.
- Bitcoin and banks: the unlikely allies in the low interest rate environment
- Fidelity’s “Bitcoin investment in your Bank account” for Core Banking Clients
- What makes this service relevant?
- Impact of the crypto-boom on mainstream banks
- Fidelity’s “Bitcoin investment in your Bank account” for Core Banking Clients
Fidelity’s “Bitcoin investment in your Bank account” for Core Banking Clients
Fidelity’s “Bitcoin investment in your bank account” is the first of its kind initiative that will allow its core banking clientele to transact in bitcoins using a mobile app.
The FIS Digital One Mobile app sports a dedicated interface for trading in bitcoin and can be viewed in tandem with your bank account. This module will also offer bitcoin custody services in collaboration with New York Digital Investment Group LLC (NYDIG).
Fidelity’s venture capital arm —- FIS Ventures, holds an undisclosed stake in NYDIG.
The press release quoted Head of Global Core Banking and Channels for FIS, Rob Lee saying that “As demand for bitcoin as a store of value continues to grow, FIS is focused on enabling our core banking clients to respond to growing market demand and better serve their customers.”
NYDIG is a fintech company with a focus on providing institutional solutions for bitcoin-related financial services.
It disclosed plans to launch an exchange-traded fund (ETF) in an SEC filing dated 16 February 2021 for bitcoin investment.
As per the filing, Morgan Stanley & Co LLC will act as the Authorized Participant to process transactions, whereas U.S. Bancorp Fund Services LLC will oversee administrative functions like taxation, accounting services, financial reporting as well as NAV calculations.
Before entering into the crypto-custody agreement, both Fidelity and NYDIG collaborated on the Quontic Bank’s Bitcoin Rewards debit card service in 2020.
What makes this service relevant?
Currently, in the digital assets domain, many enthusiasts are forced to turn towards unregulated entities, operating outside the purview of the conventional banking system for bitcoin investment.
This is applicable even for basic services like opening an account to buy, sell and hold cryptocurrencies.
It is not just the individual investors, even the corporates and institutional investors leaning towards cryptocurrencies have limited alternatives.
In the words of Robert Gutmann, the co-founder of NYDIG, “While bitcoin adoption is increasing, an accessibility and credibility gap remains for too many who want to buy, sell and hold. Our partnership with FIS, and their core banking clients, bridges this gap.” Since both the entities are federally approved financial intermediaries, Gutmann sees the commercial agreement with FIS as a credible solution for cryptocurrency adoption.
Impact of the crypto-boom on mainstream banks
The evolution of the cryptocurrency and DeFi ecosystem is forcing banks not only to re-invent their products and services but also reconsider their business strategies.
While federal bodies across the world are contemplating ways to regulate digital assets and cryptocurrencies, mainstream banks and fintech companies are focused on introducing fee-based crypto-related services for bitcoin investment. Fidelity National Information Services (FIS), an American Fortune 500 fintech company listed on the New York Stock Exchange, is the latest to launch a Bitcoin investment service, according to their press release in the first week of May.
The service will be available to Fidelity’s core banking clients.
Fidelity’s “Bitcoin investment in your Bank account” for Core Banking Clients
Fidelity’s “Bitcoin investment in your bank account” is the first of its kind initiative that will allow its core banking clientele to transact in bitcoins using a mobile app.
The Raise – Led by WestCap – Will Accelerate Growth and Further NYDIG’s Mission of Bitcoin for All
NEW YORK, NEW YORK – December 14th, 2021 – NYDIG, a leading bitcoin company, announced today a growth equity funding round of $1 billion that will value the company at more than $7 billion. The round was led by WestCap, with participation from prior leads Bessemer Venture Partners and FinTech Collective, as well as strategic partners and existing investors Affirm, FIS, Fiserv, MassMutual, Morgan Stanley, and New York Life.
The capital will be used to further develop NYDIG’s institutional-grade Bitcoin platform using recent upgrades to the Bitcoin protocol with capabilities such as Bitcoin and Lightning payments, asset tokenization, and smart contracts.
“The prospects for both NYDIG and Bitcoin have never been more exciting,” said Robert Gutmann, co-founder and CEO of NYDIG.
The FIS Digital One Mobile app sports a dedicated interface for trading in bitcoin and can be viewed in tandem with your bank account. This module will also offer bitcoin custody services in collaboration with New York Digital Investment Group LLC (NYDIG).
Fidelity’s venture capital arm —- FIS Ventures, holds an undisclosed stake in NYDIG.
The press release quoted Head of Global Core Banking and Channels for FIS, Rob Lee saying that “As demand for bitcoin as a store of value continues to grow, FIS is focused on enabling our core banking clients to respond to growing market demand and better serve their customers.”
NYDIG is a fintech company with a focus on providing institutional solutions for bitcoin-related financial services.
It disclosed plans to launch an exchange-traded fund (ETF) in an SEC filing dated 16 February 2021 for bitcoin investment.
Our roster of partnerships and strategic investors lays the foundation for NYDIG to become the leading provider of Bitcoin solutions for businesses in any industry, and this new equity capital will further accelerate progress towards making this exciting network accessible – and useful – to all.”
The funding comes on the heels of a year of unprecedented growth for NYDIG, as the firm leads the way in expanding access to Bitcoin for millions of people. The launch of NYDIG’s bank solutions business, announced in December 2020, generated a string of exciting partnerships with industry leaders Alkami, Allied Payment Network, CSI, FIS, Fiserv, Jack Henry, NCR, and Q2.
