Which Banks Are Bitcoin Friendly? Learning How to Integrate Your Finances

Which Banks Are Bitcoin Friendly? Learning How to Integrate Your Finances With Banks That Accept Bitcoin As A Valid Investment Choice

If you’re looking for ways to manage both your traditional and alternative currencies, you may have wondered, “Which banks are Bitcoin friendly?” Bitcoin and other decentralized currencies have become popular since its creation in 2009. Yet not all centralized financial organizations–banks–are ready to accept its prominence among the everyday user. While there are some US banks that let you purchase Bitcoins through your bank account, most US banks do not allow customers to purchase or exchange any type of cryptocurrency. However, as the federal government has recently discussed new legislation about digital currencies, that might all be about to change. Recently proposed legislation could create expansive changes to regulation of cryptocurrency, including the possibility of a digital dollar, measures to prevent money laundering, and more. The landscape of crypto, as a cutting edge technology, is constantly changing.

Some banks are catching on to the popularity of cryptocurrency and expanding their services accordingly. Cryptocurrency’s blockchain technology has revolutionized how we think about our finances, integrating decentralized systems and low fees while prioritizing privacy. This is not only an innovative addition to financial options; it also suggests a new accessibility option to nations with which the U.S. trades. Due to the increasing demand for cryptocurrency, banks have had to set aside their fears and cater to their customers. Below you will be able to read all about why banks have traditionally been hesitant to accept cryptocurrency, as well as more about the banks that accept Bitcoin in some way. 

Why Don’t Most Banks Accept Bitcoin?

The list of which banks are Bitcoin friendly is currently rather short for several reasons. In fact, at the moment, many major US banks, such as Bank of America and Capital One, explicitly ban their clients from using their credit cards, ACH, or wire transfers to purchase cryptocurrencies. Banks impose these bans because they see them as a means to protect not only themselves, but also their other customers before they dive into the possibilities of cryptocurrency. 

Most US banks have made the decision to not offer cryptocurrency services because they see Bitcoin prices as volatile and unsecure. Because cryptocurrency is a decentralized currency, untethered to a government, banks are unsure if there is a consistent valuation as there is with centralized forms of currency like the American dollar or the British pound. Similarly, because cryptocurrency began as a bank-free option, banks aren’t necessarily sure how they would fit in. Their concerns about cryptocurrency price jumps and fraud risks are largely unfounded, as Bitcoin is both safer and even potentially more stable than most traditional currencies. Simply because it is decentralized does not mean that cryptocurrency lacks safety precautions. The blockchain technology behind crypto may even make it very difficult for money laundering or theft to occur, and the finite amount of Bitcoins in existence effectively prevents money being “created” from thin air. And unlike banks, Bitcoin and other cryptocurrencies cannot be controlled by third parties. This decentralization minimizes outside influence and human interference, helping to eliminate biases. On the other hand, banks are highly centralized, meaning that they can make decisions that influence their users without their consent. While centralization isn’t necessarily bad, the margin of human error in these systems makes them fallible, especially when greed is involved.

But US banks’ fears are justified in some sense because, until very recently, there was no federal guidance on how banks should handle cryptocurrencies. All national banks are regulated by agencies such as the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Company (FDIC). If a bank violates the OCC’s regulations, it could potentially cause serious financial and reputational harm to that bank. The FDIC, meanwhile, examines banks and ensures that they are properly adhering to these regulations. As the OCC has been relatively silent on the matter of cryptocurrencies until recently, many banks have not engaged in alternative currencies out of fear that it would put them in hot water. Banks back away from what they may view as taking unnecessary risks for fear of losing customers and for fear of government penalties. 

The Latest Federal Legislation About Cryptocurrencies and Banks

The general attitude that US banks have historically held towards Bitcoin may start to change soon. That’s because, in 2020, the OCC announced national banks are now allowed to perform custodial services for cryptocurrencies. In other words, banks can now store digital wallet codes for their customers. Instead of being allowed only at select banks to transfer funds into Bitcoins, bank customers would now be able to buy, trade, and store cryptocurrencies in their traditional bank account. However, banks remain unable to sell cryptocurrency to their customers. As ownership of cryptocurrency rates increases, banks understand that Bitcoin will be an essential feature of the future of finance. The more the average American uses Bitcoin, the more people will be clamoring for access from all institutions–including banks. And to ensure that they have a place in that future, banks are beginning to hop on the crypto bandwagon despite their reservations. If banks want to stay on top of the financial and technological developments that interest their customers, they must update their policies and practices to include Bitcoin. Additionally, banks recognize that cryptocurrency is lucrative, and they’re looking to maximize their own earning potential.

The OCC’s announcement could have a major impact on the future of alternative currencies in the US. Now that there is legal precedent as to how banks can interact with cryptocurrencies, banks will likely feel more comfortable allowing transactions with Bitcoin. One legal precedent may lead to others, expanding the cryptocurrency possibilities. A national adoption of Bitcoin and other alternative currencies would likely cause a societal ripple effect, with more citizens and businesses accepting these cryptocurrencies as a viable option.

Which Banks Are Bitcoin Friendly? What Do We Know About the Banks That Accept Bitcoin At Least Indirectly? 

Although we don’t know exactly what the future holds when it comes to banks and cryptocurrencies, it so far looks bright. For now, however, most US banks do not offer cryptocurrency services, and those that do generally only allow you to use your bank funds to buy cryptocurrencies rather than keep them in digital wallets. While there are changes coming, for now banks and crypto-users must do with the current state of crypto acceptance. 

So, as of right now, which banks are Bitcoin friendly? Check out our list below.

USAA

USAA is a company that handles a variety of financial services, such as bank accounts, insurance policies, and investment options. It’s an expansive company, which makes sense as to why they would want to include Bitcoin and other cryptocurrencies among their offerings. USAA was the first major US bank to invest in a cryptocurrency exchange. It’s very easy to view your Coinbase transactions from your USAA account, whether you’re logged in online or on USAA’s mobile app. This makes it easy for new and old cryptocurrency users alike, so you can focus on your Bitcoin instead of learning a complicated process. USAA members can also purchase Bitcoins with USAA debit cards, bank transfers, and bank wire payments. This could make it easier to use Bitcoin more regularly, too. This bank is a great option for current military personnel, veterans, and their families who are looking for not only a traditional bank that’s Bitcoin friendly but also offers other financial services too.

Ally

Ally Bank is another virtual-only bank, but they offer 24/7 customer service support to make sure that you’re always getting the financial support you need. They also do not charge any monthly bank maintenance fees, and you’ll be hard-pressed to find many other banks with a 1% or greater annual percentage yield on your savings. This makes it a great option for those on the look out for a more budget-friendly banking system. After all, users want to get the most bang for their buck, especially when it comes to savings. Cryptocurrency can be purchased with an Ally Bank debit card, bank transfer, or bank wire. Ally makes it easy to link your bank account to Coinbase to accomplish these transactions. Ally is probably the bank for you if you want a bank that both supports cryptocurrencies and yields a nice amount of interest. 

Chime

When you open an account with Chime, which explains that it is “a financial technology company, not a bank,” you get full virtual bank functionality plus the ability to use any of their 60,000+ ATMs in the United States. That means you get the best of both worlds: digital banking and physical access to withdrawals or deposits via ATMs, as you would with a traditional bank. Chime, which offers its banking services through The Bancorp Bank, N.A. or Stride Bank, N.A., has no overdraft, monthly, or minimum balance fees, and claims that you’ll receive your paycheck direct deposits faster than with most other banking companies. Chime does not allow Bitcoin transactions to be conducted with its debit card or through bank wires. However, Chime does make it easy to use a third-party application called Paxful through which you can directly pay individuals with Bitcoins if you know their email, phone number, or username. If you want a bank with minimal fees and don’t need as many cryptocurrency functionalities as offered by the other banks on our list, Chime is a good choice for you.

Wells Fargo

Aware of how cryptocurrency can change people’s economic fortunes, established, traditional banks like Wells Fargo are starting to become ready to capitalize on this earning potential to get a cut of the profits. In 2021, Wells Fargo expanded its cryptocurrency offerings, but only to wealthy customers. By offering crypto funds to affluent customers rather than all customers, Wells Fargo is trying to protect themselves and please their biggest accounts at the same time. While it may seem unfair, this move indicates that other banks may choose to concentrate on larger crypto funds that will benefit themselves as a business. In addition, these calculated investments and expansions may help to protect banks should Bitcoin crash. Rather than undermining the entire infrastructure of its financial operation and irreparably damaging its customers’ finances, wealthy customers will be able to bounce back quicker and help Wells Fargo to do the same. Wells Fargo’s guide to cryptocurrency on their website suggests a more nuanced perspective than the all-out rejection of cryptocurrency seen from some banks.

Bank of America

Bank of America is one of the largest banks in the nation, so naturally it is likely to have many customers that are interested in purchasing crypto. Customers can use Merrill Edge, a Bank of America subsidiary, to invest in cryptocurrency-related investments such as in stock in the company Coinbase itself or in an ETF that invests in Bitcoin futures contracts. Founded in 2010, Merrill Edge is an online trading platform that allows customers to invest in exchange-traded funds or ETFs. These ETFs can sometimes offer indirect exposure to the cryptocurrency market using decentralized blockchain technology.

Chase

Headquartered in New York City, JPMorgan Chase is a multinational investment bank paving the way for cryptocurrency in banking. Chase offers a range of banking services for corporations and individuals, checking and savings accounts, credit cards, home loans, and much more. And now, customers can use the Coinbase exchange to buy and sell cryptocurrencies like Bitcoin. Additionally, Chase adopted blockchain technology in 2021 when it created JPM Coin, a currency made to facilitate international payments. JPMorgan also created a Bitcoin fund accessible to wealth management clients, expanding their cryptocurrency offerings. But, like Wells Fargo, these last two options are not available to all customers. 

Turn to Pelicoin for Bitcoin-Friendly ATMs

Knowing which Bitcoin banks are friendly can help you make smart decisions about how to manage both your traditional and alternative currencies. Perhaps you would prefer to do your traditional currency banking with one of the banks that accept Bitcoin in one way or another. And although there are US banks that offer some virtual cryptocurrency functions, no US bank currently allows you to buy and sell Bitcoins through an ATM. But that’s exactly what Pelicoin ATMs are designed to do, and with the utmost safety and efficiency for each transaction. With 35 machines in the Gulf South, we make it super convenient for you to get Bitcoins on the go. Contact us today at support@pelicoin.com or check out our FAQs to learn more about the most secure cryptocurrency ATMs in the south.