Bank That Dipped Its Toes in the Water Is Now Serving Crypto Clients

Quontic Bank, a small bank located in New York City, is now opening up its doors to a few cryptocurrency firms as it begins to embrace crypto players in the financial sector as a whole.

Date: 
August 14, 2019
Read time: 
2 minutes

Bank That Dipped Its Toes in the Water Is Now Serving Crypto Clients

Author: Dylan B
Date: 
August 14, 2019
Read time: 
2 minutes

Quontic Bank, a small bank located in New York City, is now opening up its doors to a few cryptocurrency firms as it begins to embrace crypto players in the financial sector as a whole.

Quontic Bank, a small bank located in New York City, is now opening up its doors to a few cryptocurrency firms as it begins to embrace crypto players in the financial sector as a whole.

While Quontic Bank is only one of the few major players in the game at the moment, their example allows for other banks to enter the field and begin offering their own services to cryptocurrency companies looking for legitimate backing.

The journey started out with two of the bank’s executives taking their knowledge and interest to the next level. Chief executive Steven Schnall, who was previously a mortgage lender, was privy to the release of Bitcoin when the price of the asset was less than a dollar and purchased his first Bitcoin in 2013, eventually losing 500 Bitcoins during the fall of Mt. Gox

Schnall didn’t let that dissuade him from continuing to pursue his interest in the market, however, and he soon began teaching Patrick Sells, Quontic’s chief innovation officer, about these digital assets. The pair decided to build their own Ethereum mining operation in 2018 and came close to starting their own cryptocurrency known as QCoin, raising an impressive $2.5 million in the process. (They eventually decided against it when the market crashed soon after.)

What they gathered from their ventures was that traditional banking and crypto could work together despite the massive market differences and began to work on their own vision of how they could make this idea come to fruition under today’s tight U.S. regulations. Their first move was to help their staff learn more about Bitcoin and other cryptocurrencies by providing 180 of them with $20 worth of Bitcoin when the price was hovering around $3,000. They’re also moving forward by seeking out employees with cryptocurrency experience. 

The true move that attracted the cryptocurrency community, however, came from the checking account that they provided for an unnamed client a few weeks ago and the contract that they are currently wrapping up with another client. 

Schnall made this statement regarding their crypto-friendly banking model: 

We’re just taking steps so that when the regulatory environment becomes more crypto-friendly, we don’t have a lot of catching up to do. We’re looking to diversify our product offering and our customer mix by entering into that field.

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That said, the bank wants the world to know that they are very serious and selective about who they work with. The company that they recently closed a contract with approached them a year ago, completely unprepared for any problems that they may encounter as a result of their services. Quontic made them go back and revise their business model until it was strong enough to back. 

Schnall spoke further on this point, stating: 

You don’t have mom-and-pop financial institutions. You’re not going to have mom-and-pop crypto players of any significance. Crypto companies have to have strong controls, internal audit, and a very robust system of compliance… There must also be a strong strategic motivation for us as well – such as meaningful deposit balances, etc. ‘Meaningful’ is relative to how complex, risk-laden and labor-intensive the account will be.

While Quontic Bank is only one of the few major players in the game at the moment, their example allows for other banks to enter the field and begin offering their own services to cryptocurrency companies looking for legitimate backing.

Posted by Dylan B

Dylan Buckley is a writer based in California. He became interested in cryptocurrency upon discovering it in 2014 and soon started investing as well as writing for a wide variety of clients and crypto-startups in the space. When he is not producing content for individuals and businesses, he is typically working on his own self-development content or making music.

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