Crypto banks are like a checking account and a cryptocurrency exchange rolled into one. But what is the best crypto-friendly bank?
Updated Jan 26, 2023
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It might be 2023, but it still costs the same to send cash from bank to bank as it did over two decades ago—peer-to-peer transfer apps like Cash App have done little to solve this. Bank transfers take days to process, checks can take up to a week to clear, and the fastest competitor to these legacy methods—wire transfers—still take up to 24 hours.
Waiting on banks and financial firms to give you what belongs to you is frustrating. That’s why people are turning to cryptocurrencies such as Bitcoin and stablecoins. With these digital assets, you can transfer money instantly and settle balances without waiting days for them to clear. However, many traditional banks still resist crypto adoption.
On the other side of that resistance are a handful of neobanks that want to help you add crypto to your portfolio. Crypto-friendly banks offer all the perks of traditional banking services—direct deposits, earning interest, and insure your funds—with the benefits of digital assets. Let's delve into what a crypto bank is and what the best crypto-friendly banks are.
Crypto-friendly banks are financial institutions that provide traditional banking services alongside crypto offerings. Historically, getting payments from your bank account to the blockchain meant jumping the traditional payment rails to the new ones—but now, many bank accounts and debit cards work alongside crypto exchanges.
This opens up some pretty fun opportunities for the crypto-aware: quick and easy access to web3, DeFi, and NFTs; lower wait times to settle crypto transactions; and faster transfers to your friends.
The intermingling between traditional, boring banking and the nascent world of digital assets is only expected to grow—as it did with Kraken crypto exchange obtaining a Wyoming bank charter in 2020. Crypto exchange FTX.US applied for its own bank charter last May, and many charter-less exchanges like Coinbase have already forged partnerships with legit banks.
Many crypto-friendly banks offer the option to buy, sell, and transfer crypto—which is not all that different from mainstay crypto exchanges. The benefit of the banking and crypto rails being so close is the insurance you pick up from having an FDIC-insured bank account and the cutdown on time in the banking system. On the flip, the drawdown is less desirable crypto trading fees than you’d get on an exchange.
You could start to use crypto exchanges like Coinbase as your crypto bank by taking advantage of the company’s direct deposit feature, which allows you to buy crypto directly from your paycheck each pay period. And while that has an allure, that comes with few assurances—most exchanges are not insured, could result in loss of funds, and don't let you time the market.
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Ultimately, opening an account at a crypto-friendly bank can be a good idea, depending on whether you're already living the crypto lifestyle. If digital assets are a significant part of your net worth or if you regularly conduct crypto transactions, then it may pay to add one of these banks to your arsenal.
While some banks have added crypto to their suite of products in the years since its meteoric rise, some were built specifically with the crypto space in mind. We’ve made a shortlist of the best crypto-friendly banks.
If you're a crypto purist, look no further than Juno. It offers all of the redeemable traits of a traditional bank account—you can send your direct deposit, pick up the coveted FDIC insurance on your balances, and make up to 2.15% APY on your balances—with the many benefits of a cryptocurrency exchange.
The Juno dashboard shows your bank account, crypto assets, or cashback debit card.
Source: juno.finance
In that sense, it’s one of the best onramps for crypto. Though it doesn’t have thousands of assets or the kind of price execution you’ll get from Binance or Coinbase’s premium offerings, it works. Juno currently offers USDC, BTC, and ETH among others.
However, where Juno really leads is in rewards. The company offers a cashback debit card with up to 10% cash back on $300 of spend at brands you choose. They also have offered a number of other promotions, and the company announced a token-based loyalty program called JCOIN—for higher cash back limits, interest on bank deposits, and more—in October 2022.
Juno is one of the best bitcoin friendly banks for anyone living the crypto lifestyle. It’s not a perfect solution—things do break at times, and the product is still in beta—but it is among the best options at your disposal for its banking suite, crypto trading, cashback debit card rewards, and loyalty program.
Robinhood might be a perplexing constituent of this list, namely because it’s not a bank at all—it’s a brokerage. However, cash deposits at Robinhood have up to $250,000 in FDIC insurance and are currently generating up to 3% APY (if you pay $5 per month for Robinhood Gold). That means you can set up your direct deposit, make money in your sleep, and spend it using a Robinhood debit card.
If it looks like a bank, walks like a bank, and talks like a bank? Well, it’s still not a bank—but it yields many of the benefits of a crypto-friendly bank. Having cash locked and loaded in a brokerage account lets you purchase stocks and crypto on command.
Crypto trading is easy using your idle cash in Robinhood with little wait time for settlement. That means you can take your pick of cryptocurrencies like BTC, SOL, USDC, and others—then transfer it out instantly after five days. You could send it to Robinhood’s new crypto wallet or another outside platform, crypto exchange, or hardware wallet.
That could be irredeemable for certain maximalists, especially since you can make instant transfers on other platforms. However, it’s still good as gold given Robinhood’s visibility in crypto and equities trading, plus the high interest rate you’ll pick up while sitting on cash.
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The U.S. arm of British fintech Revolut offers a traditional banking stack—so yes, FDIC insurance, 1.2% APY in “savings vaults,” and a debit card—along with wealth products that enable you to buy stocks and crypto. In that sense, Revolut is one of the more crypto-friendly bank services where you can instantly go from cash to crypto without paying fees as well as instantly pay other Revolut users with your crypto balance.
However, there are some drawbacks. Your crypto can’t leave the platform, so you’ll have to settle for watching the balances in Revolut’s app. And unfortunately, even when crypto firms say there are “no fees,” there are always fees. In this case, a spread of up to 3% could apply to your order, so you might pay up to 3% more for your crypto (so much for “no fees”).
Regardless, if you’re looking for a quick-and-easy way to get into crypto without leaving your bank account, Revolut is an excellent solution.
Outside of the three names above, there are certainly other banks that are crypto-conscious. Among them are SoFi and Ally Bank, two neobanks-turned-actual-banks. Both companies picked up bank charters during the pandemic and are modern enough to know that being a crypto-friendly bank means big money.
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People who prefer the comfort of large financial institutions might enjoy the relative flexibility that both SoFi and Ally offer. That’s because, while crypto is a part of their business, it's not their main driver. They operate as full-service banks with credit card products, borrowing options, and high-interest checking accounts.
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SoFi offers dozens of crypto assets, as does Ally—access to Bitcoin futures contracts and trusts. You can also trade crypto, but you can't transfer digital assets out or easily collect yield on them. However, you could benefit from being able to trade crypto stocks like Coinbase (COIN) and PayPal (PYPL) from the convenience of your bank account.
Ultimately, SoFi and Ally are more comfortable to use if you still prefer large institutional banks. And though they’re not necessarily the most crypto-oriented product, they do a lot of things right.