Digital asset manager NYDIG is partnering with banking technology provider Moven to offer support to banks wishing to launch bitcoin products. The move comes in the wake of several letters from the US Office of the Comptroller of the Currency (OCC) giving banks in the US the green light to custody cryptocurrencies and conduct payments and other stablecoin activities.
NYDIG and Moven
Moven founder Brett King said "If PayPal and Square can do it, community banks should be able to do it too." Many of Moven's clients have around $ 1 billion in total assets, he said, with some operating up to $ 10 billion in total assets.
NYDIG is Moven's second partnership in the United States, King said. The first collaboration was with Q2 banking technology provider in November last year. NYDIG exited Stone Ridge Asset Management in 2017 worth $ 10 billion, hired BitLicense architect Benjamin Lawsky, and secured $ 50 million in funding to form the team.
In December, he hired Patrick Sells from Quontic Bank of Manhattan as head of banking solutions. This week, the company announced that it has acquired Digital Assets Data to complement its cryptographic research and analysis offering.
Moven advertises itself as a turnkey digital banking product that can be deployed in 30-60 days. The partnership will allow NYDIG to rapidly distribute its bitcoin products (quotation BTC) to banks, Sells said.
Moven will take advantage of NYDIG's APIs to offer buying, selling and custody services, as well as more sophisticated bitcoin products such as a money market account that pays interest in bitcoin or a credit card that has a bitcoin reward component, Sells added. “What's important for any new technology is how simple it is to adopt,” Sells said.
Banks and cryptocurrencies
In an environment of low interest rates, Sells expects banks to resort to a new form of income. In an online survey of over 2.000 U.S. consumers, NYDIG found that 80% of bitcoin holders would move their cryptocurrency to a bank if they had secure storage.
Of those same holders, 71% would change their main bank account if a bank offered bitcoin-related products, and 81% would be interested in buying bitcoin through their bank.
NYDIG aims to provide a less risky option for banks looking to offer bitcoin products to their customers, Sells said. Banks using digital asset manager banking solutions must not touch cryptocurrencies.
“As a former banker, one of the things I realized is that catching up on something like peer-to-peer payments is what really costs my bank,” Sells said. "Today, banks have a 0% portfolio share in cryptocurrencies and this is a phenomenal interest-free income opportunity."
