All trade-related activities will be handled by NCR, while crypto custody will be handled by NYDIG.
Customers will have a seamless banking-like experience dealing with their crypto holdings as a result of the agreement, which will compete directly with existing crypto exchanges.
NYDIG, a digital asset management startup, has partnered with NCR, a payment giant, to offer Bitcoin purchasing services to 24 million banking customers across 650 banks in the United States. NCR will equip community banks with a mobile payments infrastructure that will allow them to provide their consumers a seamless and secure crypto trading experience.
The decision to provide this service comes as a result of increased demand from banks and credit unions, according to NCR, an Atlanta-based payment company. Instead of using third-party exchanges to buy cryptocurrency, these companies want something that can be done in-house and is smooth.
Douglas Brown, NCR’s president of digital banking, commented on the development:
We’re firm believers in crypto’s advantages and strategic applications. As proven by NYDIG, this is true of our banking connections, as well as merchants, restaurants, and other businesses.
Banking and credit union users will be able to acquire bitcoin/crypto straight through their existing accounts using NCR’s service. This puts the payments behemoth in direct rivalry with current cryptocurrency exchanges.
Custodial services for crypto purchases, on the other hand, will be handled by NCR’s partner NYDIG. NYDIG President Yan Zhao said in a statement to Forbes:
Many of these institutions have noticed that shifting money from the bank to exchanges like Coinbase is one of the largest outflows from their depositors. That is one of the reasons why banks are so ecstatic to have this option for themselves and their customers.
Cryptocurrency Custody and Project Implementation
As previously said, NCR will make buying, selling, and trading Bitcoin and other digital currencies using their mobile application completely hassle-free and frictionless. Customers will get the impression that they are working directly with banks through their registered accounts as a result of the transaction. NYDIG will be the custodian of the actual assets on the backend.
Furthermore, NCR consumers do not need to be concerned about the security of the private keys that grant them access to cryptocurrencies. In a cold-wallet scenario, NYDIG stated it will store the precise quantity of assets that its clients purchase. “Every dollar of customer bitcoin is bitcoin held in custody, in trust for the customers,” Zhao explains.
Furthermore, under the current arrangement, all Bitcoin and cryptocurrency purchases are made through OTC desks. As a result, the buyer pays a premium for the cryptocurrency, which is determined by trade size and other criteria. However, NYDIG will take care of it by charging the bank a monthly charge per user. According to the digital asset management organization, this will significantly lower transaction costs in the cryptocurrency market. Patrick Sells, the head of financial solutions at NYDIG, said:
I believe that transaction fees will be lower through banks than they are now in the marketplace. The banks, on the other hand, get to choose the amount of the transaction fee.
According to NCR’s digital banking president Douglas Brown, the payment giant would eventually take possession of its customers in phase two of the deployment. NCR’s main purpose is to make crypto spending and use more accessible to the general public.
“We have a bigger aim to do a variety of things with crypto,” Brown says, “which will extend into our multivertical marketplaces, retailers, and restaurants.” “After that, there are more capabilities centered on digital banking.”
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