Up to date, cryptocurrencies are very popular and more and more projects decide to conduct an ICO, IEO or STO. Cryptocurrency issuance is literally an opportunity to issue your own money. If we are talking about fiat funds – the state is behind them, but when it comes to cryptocurrencies or tokens, a certain circle of people, a company or an idea stands behind them. And the more popular your project is, the more your token is appreciated in the cryptocurrency market. Every project that works with cryptocurrencies faces the same problem: how to open a bank account for a crypto project? Banks do not like to deal with cryptocurrencies, and in most cases, only mentioning cryptocurrencies is enough for a bank to immediately refuse to open a bank account for a client, or even worse, freeze or close an existing client bank account.

Banks and cryptocurrencies. Why are they feuding?

Please note that banks have a negative attitude to cryptocurrencies, but not to blockchain technology. Blockchain as a technology is popular with most banks, because:

•  it will radically transform the entire financial market;
•  protected from breaking;
•  makes it possible to significantly reduce the time of transactions, regardless of which country the funds are sent to.

So, Bank of America has a significant number of patent applications in the field of blockchain technology, including a “system for the automatic exchange of digital currencies”.

Among the “classic banks” that are developing their own cryptocurrency are: 

•  J.P. Morgan (JPM Coin);
•  Mizuho Financial Group;
•  Goldman Sachs;
•  and even the National Bank of Great Britain (RSCoin).

But with cryptocurrencies, the situation is different.

According to representatives of Bank of America, J.P. Morgan, Lloyds Banking Group, Citibank, cryptocurrency is too “volatile”, “anonymous”, “unsecured” and “high-risk”, etc.

In this case, the example is given to the very first cryptocurrency – Bitcoin.

With the advent of cryptocurrencies, everyone got the opportunity to issue their own analogues of money or securities, and such competition can completely destroy the existing banking system and gradually displace classic banks, which banks cannot allow.

Are there any banks that work with cryptocurrency today?

You can find a lot of information online, that a particular bank is loyal to cryptocurrencies and is ready to open bank accounts for crypto projects, but in fact 95% of these banks still refuse to open a bank account.

In rare cases, banks agree to cooperate with the most popular crypto projects. And this is possible only after a thorough check of all technical features and internal procedures of the project. The development and implementation of all necessary measures, as well as their implementation in practice, may take years.

And even if the bank has confirmed the possibility of opening an account, there is always a risk that at any time your bank account may be frozen/closed, with all the funds of customers maintained in this account.

A good example of a crypto project striving to become a “crypto bank” is the “Polibius” bank, which to date has undergone major changes and now it is a 3-in-1 financial institution – a classic bank for fiat funds, a cryptocurrency wallet and an online cryptocurrency exchange in one application.

Is there a license governing the activities of the “crypto bank”?

To date, such licenses do not exist in any jurisdiction in the world.

Moreover, according to preliminary information, implementation of such a license is not planned in the near future.

This is due to the fact that at the moment only a few countries provide the legal opportunity to engage in activities related to cryptocurrency. Only a few states have clear regulation of crypto projects, let alone a full-fledged legal crypto-bank.

Is there any prospect that in future banks will start to open accounts for crypto projects?

There are a number of tasks that must be solved, before the banks will agree to reconsider their attitude to cryptocurrencies:

1. The introduction of clear procedures for licensing, regulation, reporting, etc., on the   activities of projects related to cryptocurrencies at the international or state level.

2. Establishing a fixed rate of cryptocurrencies regarding to fiat currencies.

3. Full deanonymization. Each transaction should have a specific person, and not just a   nickname or wallet number.

A good example is Bitstamp, the most popular exchange for professional traders, that
was one of the first who opened a bank account to receive customer funds.

In order to trade within Bitstamp, every new user (whether it is an individual or legal entity) must undergo a thorough AML/KYC procedure to confirm their identity, as well as the legality of the source of funds that will be used for trading within this platform.As we can see, today it is not easy to opening a bank account for a crypto project, for conducting an ICO or STO, or other high-risk project, due to opposition from classical banks and the lack of clear regulation in most developed countries.

In the future, when most states agree on the status of cryptocurrencies and introduce a clear licensing procedure for such activities, banks will be able to consider cryptocurrency not as a threat, but as a potential partner and will open bank accounts for crypto projects.