As Traditional Banks Step Back, New Players Fill Gap in Crypto Banking
With traditional banks becoming more cautious about servicing the cryptocurrency industry, smaller regional banks and alternative payment service providers are stepping up to fill the gap.
In the US, Customers Bancorp, a Pennsylvania-based lender, has become a popular choice, having launched a real-time payment platform to support the settlement of US dollar transfers underlying cryptocurrency transactions, according to a new list of crypto-friendly banks compiled by Bloomberg News.
Other US lenders that have provided banking services to some cryptocurrency companies include Cross River Bank, Western Alliance Bancorp, and Axos Financial.
The change in the banking landscape came after the collapse of some crypto-friendly banks led to increased scrutiny of banks providing services to crypto companies
As reported, Silvergate Bank announced its liquidation on March 8 after struggling for several months in the wake of the collapse of FTX.
Just two days after the collapse of Silvergate, Silicon Vally Bank, one of the most popular lenders to Silicon Valley tech and growth startups, suffered from a bank run.
And on March 12, federal regulators shut Signature Bank down over fears of continued contagion. Regulators hoped that the closure of Signature Bank would help contain the panic.
The collapse of Silvergate and Signature Bank prompted a scramble among cryptocurrency firms to find other banking alternatives.
This has led to a more fragmented and global banking landscape, and a banking system that could be more resilient should any of the banks that are currently supporting the cryptocurrency companies stop doing so.
“Now it’s more of a handful of names, where you have to go and do your own due diligence because they are not as
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