THE FISERV-NYDIG PARTNERSHIP
Giving relief to people around the globe who rely on traditional banking to conduct transactions, Fiserv , another wall street giant has announced partnership with NYDIG, a bitcoin service provider, to offer banking services in the Bitcoin realm. Fiserv is another major institution which has entered the Bitcoin market after Goldman Sachs and Morgan Stanley. As expected, the entry of one institution has inspired others too, to provide those services to their clients. This partnership marks the entry of Wall Street into the new era of cryptocurrency.
Are these companies reliable?
Fiserv is a global fintech and payments company with leading services for banking, commerce, merchant acquiring, billings and payments. Fiserv is also a part of the S&P500 and is a Fortune 500 company. On the other hand, NYDIG is solely a Bitcoin service provider. NYDIG’s motto is to provide their clients access to the “the unrealized potential of this emerging asset class.” In the pursuance of this motto, NYDIG accepted Fiserv’s partnership to mainstream Bitcoin trading, buying, selling and holding.
What will this partnership offer?
This partnership will allow all financial institutions, regardless of their size, to enable their customers to buy, sell and hold Bitcoin through their bank accounts themselves! This step has greatly integrated the traditional banking with the next generation currency. Fiserv and NYDIG have taken this initiative to meet the growing demand among retail investors and traditional banking users. This initiative will also ease trading in Bitcoin as user need not create accounts on various exchanges in order to buy Bitcoin. They can simply trade using their existing bank account. The banks and credit service providers will also benefit from this partnership as trading Bitcoin through banks will increase their revenue from operations and the banks will emerge as strong competitors to exchanges such as Binance, Zebpay and Coinswitch.
Why did they take this initiative?
One of the executives at Fiserv justified the introduction of banking in Bitcoin. As interest in cryptocurrency has risen exponentially, especially bitcoin, people usually turn to banks and other financial institutions to provide them access to new asset class.
The survival of financial institutions rests upon the condition that the serve their customers’ demand to the best of their ability and cryptocurrencies have certainly accumulated a huge base, not only in the U.S.A but around the globe.
Banking is known for its dynamic nature and its adoption of innovation. Banking has moved from the standard borrowing and lending to offering securities and now are working towards providing cryptocurrency related services.
A third party, First Foundation Bank is also assisting this partnership to bring about modern features related to Bitcoin to the market. The CEO of First Foundation Bank also named the growing demand among its users as the primary reason for this initiative. The CEO further states that it is the company’s aim to provide customers access to their preferred asset class through their trusted platforms.
Why does this partnership offer only Bitcoin?
Since Bitcoin is the most demanded crypto in the market, the firms chose to start the project with it. Moreover, the step to integrate banking with crypto is new which is why the companies chose Bitcoin as a strategy tester. If the project is successful and gathers popularity, the banks may add other fundamentally strong coins such as Ethereum and Cardano in the future. The banks will probably will not offer altcoin services due to its risk and illiquidity. Their primary motive is and always has been to protect the interests of its customers.
What are the benefits to retailers and banks?
Through this initiative, users are not required to open a separate account with any broker or exchange. They can simply transact through their mobile banking portal. However, the transaction and maintenance charges are not known till date. Users must assess the charges for purchasing and selling Bitcoin before conducting any transactions to protect their financial interests in the long term. What are the benefits to retailers and banks?
Moreover, the users need not worry about the authenticity of the exchanges because they will now be able to hold their digital asset in their trusted bank account itself. The question of safety of their funds and assets will completely be out of the picture. They need not waste time on researching the background of the platform through which they intend to trade in Bitcoin.
This partnership will prove to be a very profitable stream for banks as they will earn increased revenue through trading commissions or brokerage. Moreover, banks will gain more popularity among people and will continue to thrive despite intense competition in the economy. The ease of trading in bitcoin will also encourage non-users to open a bank account with the respective service providers.