With the rapid rise of cryptocurrency, there has always been a subtle unease between the traditional banking and bitcoin communities. Now word on the street is that an alarming number of bitcoin businesses, particularly those engaged in consumer transactions and money conversions are having their associated bank accounts shut down with little or no notice.
In my recent article for BTCManager titled The Bitcoin and Banking Relationship: One Bank’s Effort to Bridge the Gap, I feature some insights on this developing trend via an interview with the San Diego based and bitcoin-centric Silvergate Bank.
Chris Groshong, Coinstructive’s founder and CEO says that in today’s age of alternative currency options there are very few banks willing to invest the time to educate themselves on emerging cryptocurrencies like bitcoin that some see as controversial and tied to negative press. “In my view, a well-informed bank is one that will have a conversation with you if they feel that something is curious or off with your account, versus just shutting you down and telling you to move on”, says Groshong.
He notes that the key word here is “relationship,” an element that banks can sometimes overlook amid regulatory requirements and red tape. “Yes, there are guidelines tied to banking specifically. Yet the bottom line is that you, the business, as well as the bank should strive to be a part of a healthy, long-term relationship.”
Groshong is effusive in his praise of Silvergate Bank for embracing the dynamics of this two-way exchange. “Silvergate understands that the business banking customer is ultimately going to figure out that bitcoin is a cheaper and faster means of transacting money and that if it make sense to them, they will use it. It’s clear that as a bank, they’re willing to endure some early growing pangs to embrace bitcoin businesses. As I see it this will yield huge dividends for them down the road while other banks scramble around in an attempt to get to get their arms around this change.”
In the end, says Groshong, it’s all about creating a win-win alignment between banking and the bitcoin ecosystem that’s lasting and productive. “Here at Coinstructive, we can point a business in the right direction by helping them connect with banking relationships that mesh well for them. Time wasted trying to figure out what direction to go can be paralyzing to a business or company, especially when it comes to revenues and cash flow. As a business owner there is nothing worse than feeling that you’re in a boat with one oar. That’s why we’re committed to putting some wind in our clients sails to help them remain on course.”
Michael Scott is a journalist specializing in emerging digital economy trends and CoinStructive’s resident blogger.