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This guide will take you through the top crypto friendly banks in 2024. You’ll be in a position to make informed decisions about your finances.
But first...
What Is a Crypto Friendly Bank?
A crypto friendly bank is one that accommodates and supports cryptocurrency transactions.
These banks allow you to manage and use your cryptocurrencies for various financial activities, such as buying goods, saving, taking out loans, and investing, just like you would with regular money.
They provide tools and services that make it easy for you to handle your cryptocurrencies within your everyday banking experience. This means you can access both your regular funds (such as USD) and your crypto assets from a single bank account, making it simpler to manage your finances.
Why it’s becoming more difficult to find crypto-friendly banks
Finding banks that are supportive of cryptocurrencies has become more difficult due to what some have labeled "Operation Choke Point 2.0." This refers to a perceived effort by the Biden administration and regulators to disconnect the cryptocurrency industry from the traditional banking system.
Banks that have served cryptocurrency customers appear to be targeted for closure, even though there is no clear legal justification for such actions. A report from the White House Council of Economic Advisers shows a negative stance toward crypto within the US government.
The Federal Deposit Insurance Corporation (FDIC) has required some banks to discontinue services to crypto-related businesses. This has created instability in the banking sector. As a result, some crypto firms are looking to overseas banks in Europe and the Caribbean for solutions, potentially leading to a shift away from US jurisdictions.
Top 5 Crypto Friendly Banks 2024
Revolut is a neobank, whose platform allows buying, selling and exchanging cryptocurrency, like Bitcoin, Ethereum and more.
Pros: Revolut offers a user-friendly interface and range of cryptocurrency options.
It has a range of products, such as Learn & Earn, which allows users to earn crypto rewards after completing lessons on various crypto topics, and Pay with Crypto, which allows users to pay for everyday purchases from their crypto balance.
Cons: The London-headquartered bank doesn’t offer crypto loans. It announced it was closing its US crypto platform in 2023, citing the uncertain regulatory environment, leaving some users in the lurch.
Juno is a fintech firm that works with Evolve Bank and Trust, a tech-centered financial organization, to offer various banking services. These include depositing, buying, selling, and withdrawing crypto to external wallets. Its savings accounts offer 3% APY on Bitcoin and Ethereum and 6% APY on USDC.
Pros: Users can settle bills using their Juno account and access to a network of over 80,000 ATMs without fees. Juno currently facilitates 36 cryptocurrencies. You can earn up to 5% interest for the first $25,000 deposited.
Cons: Juno was forced to temporarily pause its services in January 2023 when its former crypto custodian Wyre collapsed during the market downturn.
It doesn't offer loans.
Formerly the Provident Bank, BankProv is the United States' 10th oldest bank. If you are in Massachusetts or New Hampshire, you can visit one of BankProv’s physical branches. It recently ventured into cryptocurrencies services.
Pros: Its primary focus is catering to crypto-oriented businesses, offering them API banking solutions and crypto-backed loans. BankProv is affiliated with the DIF, which insures USD funds that exceed the FDIC limit.
Cons: No interest is paid on accounts below $50,000, and it is only available within the US.
Ally Invest offers customers the chance to invest in crypto indirectly through crypto trusts and stocks
Pros: You can buy crypto with your Ally Bank account but need to connect to a FINRA-licensed cryptocurrency exchange. There’s also the option to buy crypto-specific funds and stocks via its platform.
Cons: It doesn’t directly process cryptocurrency transactions, or offer loans.
The digital bank is available across the US.
Pros: Its USD savings account offers a high rate and no monthly service fee.
Cons: It doesn't offer loans.
It recently discontinued its Bitcoin Rewards Checking program, which allowed customers to earn bitcoin that can be cashed in monthly.
What Makes a Bank Crypto-Friendly?
The best crypto-friendly banks bring together the convenience of traditional banking or financial services with the opportunities and possibilities offered by cryptocurrencies. They offer some, if not all of the following:
Secure Wallets
These entities provide digital wallets designed to securely store your cryptocurrencies. Think of these wallets as digital vaults that protect your assets from unauthorized access or cyber threats.
Easy Buying and Selling
Some crypto-friendly banks or financial service providers allow you to buy and sell cryptocurrencies through your bank account. This eliminates the need for separate cryptocurrency exchanges and simplifies the process of acquiring or converting your digital assets.
Integration with Popular Platforms
These entities often integrate with well-known cryptocurrency platforms, allowing you to connect your bank account directly to these platforms for smoother transactions. This integration streamlines the process of moving funds between your bank and your favorite crypto exchanges.
Multi-Currency Support
In addition to traditional currencies such as USD, these banks usually support multiple cryptocurrencies. This enables you to hold and manage a diverse portfolio of digital assets all within the same banking ecosystem.
Seamless Transactions
You can use your cryptocurrencies for various financial activities, such as making purchases, paying bills, and even sending money to friends and family. This integration of cryptocurrencies into everyday transactions offers you more flexibility in how you manage your money.
Investment Opportunities
Some crypto friendly banks provide investment options tailored to cryptocurrencies. This could include savings accounts with interest for your digital assets or investment products that involve cryptocurrencies.
User-Friendly Interfaces
These banks offer user-friendly online platforms or mobile apps that make it easy to monitor your cryptocurrency holdings, track transactions, and manage your overall financial portfolio.
Enhanced Security Measures
Given the nature of cryptocurrencies, security is a top priority. Crypto friendly banks implement advanced security measures like two-factor authentication, encryption, and secure login procedures to safeguard your assets.
Educational Resources
Many of these banks offer educational resources to help you understand cryptocurrencies and how to use them effectively. This is particularly helpful if you're new to the world of digital assets.
Customer Support
Crypto friendly banks recognize the unique challenges of dealing with cryptocurrencies and often provide dedicated customer support for any issues related to your digital assets.
Crypto Banking vs. Crypto-Friendly Banking
Crypto banking refers to using a bank solely for cryptocurrency transactions. Crypto-friendly banking refers to banks that integrate cryptocurrency services in their traditional banking platform.
There are also crypto-native financial service providers. While these entities offer banking-like services, they do not conform to the conventional definition of "banks." With a few limited exceptions, most operate exclusively online.
There is a third option: crypto service providers, which offer loans, savings and transactions.
Top crypto- native, financial service providers
Although not technically a bank, Ledn offers many of the features you’d find at a crypto-friendly bank, and more. There are a range of crypto services, with a focus on security and interest-bearing accounts.
Ledn Loans are fast, simple and accessible. All you need is the minimum $1,000 USD equivalent in BTC collateral and you are automatically approved without any further credit check required.
Its Growth accounts offer up to 8.5% APY. Its unique B2X product is a quick and simple way to double your BTC balance. It is a one-stop service that combines a Ledn Bitcoin-backed Loan and a BTC purchase.
As well as competitive rates, it offers the security you’d find at crypto-friendly banks (which rarely offer loans).
Pros: Unlike traditional banks, there is no central bank backstopping most crypto lending platforms. In many developed countries, deposit insurance means your deposits are protected, even if your bank goes under. Ledn has addressed this by ring-fencing Growth accounts from Ledn's products or services, effectively eliminating insolvency risk and making crypto lending safer for everyone.
That’s because stringent risk management and thorough due diligence are at Ledn’s core. It places a strong emphasis on safeguarding digital assets with advanced security measures, including AES-256 encryption and two factor authentication. For asset storage, it has formed a partnership with BitGo.
It was the first crypto lender to complete a Proof-of-Reserves attestation procedure conducted by an independent accountant. These procedures verify the accuracy of user balances, enhancing transparency and trust.
It only collaborates with top-tier borrowing institutions that share similar terms and asset standards.
Ledn's asset selection strategy focuses solely on the most liquid assets within the industry, such as BTC, USDC, and soon USDT and ETH. This approach is reinforced by comprehensive due diligence, facilitating globally viable lending and savings opportunities.
Cons: You can't buy or sell crypto on Ledn with fiat. The options are to trade, save, or borrow. Product assortment in Canada and the USA is limited due to regulatory uncertainty about yield generating accounts. The platform is primarily browser based and the app has limited functionality for now.
Founded in 2014 as E-coin, Wirex is a financial service platform that allows users to send, receive, exchange, and spend a range of digital and conventional currencies via an app and debit card.
Pros: Its X-Accounts offers an annual percentage yield (APY) of up to 16% on crypto and fiat deposits. It supports over 250 cryptocurrencies and 16 fiat currencies. It is regulated by FCA, Bank of Lithuania and by the MAS.
Cons: Although fees initially appear to be low, they can add up when paired with spread costs and exchange rates. Users have reported problems with its mobile app, including crashes, rejected transactions, and failed transfers.
It doesn't offer loans.
Zero-balance personal accounts have a $10 monthly fee.
How to Choose The Right Crypto-Friendly Bank or Service Provider For You
Understand the Fees and Costs
These charges can significantly impact your overall crypto banking experience. They include:
Transaction Fees
Customers using crypto-friendly banks may face transaction fees for moving cryptocurrencies within or outside their bank accounts, with costs varying based on transaction type and amount.
Withdrawal Fees
There may be fees for withdrawing cryptocurrencies to external wallets or exchanges,
Deposit Fees
While less common, some banks or financial service providers impose deposit fees, especially for specific payment methods.
Exchange Rates
Exchange rates significantly impact the cost of using crypto-friendly banks or financial service providers, as converting cryptocurrencies or trading between crypto and fiat can incur spreads in rates.
Hidden Costs
In addition to the more obvious fees, watch out for hidden costs that might not be explicitly stated in a bank or financial service provider’s fee schedule.
Consider Regulatory Compliance and Legal Aspects
Different countries have varying regulations for crypto transactions. Ensure that your chosen crypto-friendly bank operates within the legal boundaries of your jurisdiction. Non-compliance with crypto regulations can have severe consequences, including legal repercussions and the freezing of assets.
The regulatory landscape for cryptocurrencies is fluid and subject to change. What might be permissible today could face new restrictions tomorrow. Consider whether your bank or financial service provider not only complies with existing regulations, but also has the flexibility to adapt to any future changes.
Factor in Customer Support and User Experience
Responsive customer support and an intuitive user interface will make your life easier if you need to act fast.
Understand Proof of Reserves
Proof of Reserves (PoR) ensures a crypto service provider holds enough assets to cover customer deposits or liabilities. This ensures transparency and builds trust in the crypto service provider's operations.
Conclusion
Crypto-friendly banks and financial service providers blend traditional financial services with cryptocurrency services, making it easier to manage digital assets alongside regular funds. Each offers unique features and services, but only Ledn offers loans, competitive rates and world-class security.
Start earning from your crypto with Ledn today.
Sponsored by 21 Technologies Inc. and its affiliates (“Ledn”). All reviews and opinions expressed are based on my personal views.
