Cryptocurrency is gradually entering the mainstream market in many regions. Some countries have already legitimized cryptocurrency and accept payments in Bitcoin, Ethereum, etc. Have you ever thought about where does the infrastructure for crypto banking come from? The traditional banking system doesn’t support crypto transactions. That’s why technologists are engaged in producing specially designed crypto banking systems. Interested? Creating everything from scratch is not necessary. Buy crypto banking solution from blockchain service providers and customize them to suit your requirements.
Let’s find out how crypto banking works and the benefits of offering crypto banking services to customers in today’s world.
What is Crypto Banking
Crypto banking is where virtual/ digital currencies are deposited, loaned, traded, and repaid on a secure blockchain. Similar to traditional banks, crypto banks provide financial services to account holders. The difference here is that crypto banks offer virtual services on a DeFi platform. DeFi is short for decentralized finance, a system that aims to bring greater transparency and clarity to transactions on the blockchain.
The crypto bank allows users/ customers to create accounts and deposit cryptocurrency. Users can swap, trade, lend, borrow, and withdraw crypto through the bank’s DeFi platform. Every user is provided with an online crypto wallet to store the virtual currency and use it for transactions. There are two types of crypto wallets provided by the banks:
Custodial Wallet –The private keys are held by the crypto bank, even though the user can access and use the wallet.
Non-Custodial Wallet – The wallet belongs only to the user. The public and private keys are held by the user and no one else. These wallets are usually designed as a browser extension.
A non-custodial wallet is a safer choice as it gives you full control over the wallet with your crypto assets.
How does a Crypto Bank Setup Work
The user should initiate the transaction by entering the private key provided by the bank. It is similar to the PIN or passcode.
The user can then proceed with the transaction (depositing, trading, withdrawing cryptocurrency).
The transaction can take a few minutes, depending on the traffic volume. It occurs directly between the users (or the user and another party), with the bank acting as a service provider.
The users will exchange the public key to complete the transaction (send crypto from one wallet to another).
You don’t have to rely on any other person/ establishment to make a crypto transaction. The middlemen fee is absent, though you may have to pay a small transaction fee for using the blockchain platform.
Crypto banks allow crypto assets as collateral when borrowing money on the DeFi platform. It’s a simple process of trading smart contracts and doesn’t require you to sign a bunch of applications or wait for days to get the loan amount.
The following are some reasons why crypto banking is becoming popular:
Blockchain speeds up remittances and reduces the transaction fee. It takes less time to send the digital currency to the other person. Holidays, business timings, etc., will not play a major role in crypto banking.
A smart contract differs from a traditional contract and has built-in regulations to automate its flow on the blockchain. This automation reduces the workload on the financial institutions and encourages more transactions.
KYC and Authentication
Crypto platforms take necessary measures to ensure user authenticity while providing anonymity. KYC and AML (anti-money laundering) investigations keep user information private and reduce the risk of fraudulent transactions on the blockchain.
No Geographical Restrictions
Crypto banking services remove cross-border and time zone restrictions. You don’t have to worry about last-minute payments to another country. Furthermore, you save money by avoiding currency conversions and additional charges. Just send cryptocurrency from your wallet to another belonging to a person from any country.
Why Choose White Label Services
There’s no need to build crypto friendly banking solutionsfrom scratch. The process is time-consuming, cost-intensive, and stressful. Existing financial institutions and startups can use white label services to customize the crypto banking software and create their own version.
White label service providers reduce costs and save time and resources spent on developing the crypto banking platform. You can offer more services to customers in less time, and that too without going over your budget. The service providers also take care of maintenance and upgrades so that you can focus on developing the business.
Crypto banking solutions are in great demand in the current market. Japan, Canada, Switzerland, Thailand, Russia, Singapore, etc., are some countries that have adopted crypto banking. With cryptocurrency gaining more popularity each day, there’s a need for crypto banks and DeFi platforms to facilitate faster, easier, and more secure transactions between users from anywhere in the world. Want to own a crypto bank? Get along with the Antier team to buy crypto banking solution par excellence.