Banks Offering Cryptocurrency Services? A New Reality Is Arriving

Noelle Acheson is a 10-year veteran of company analysis and corporate finance, and a member of CoinDesk's product team.

The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday, exclusively to our subscribers.

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Bitcoin might finally be overlapping the broader fintech industry's popularity.

Norway's largest online-only bank, Skandiabanken recently announced it plans to offer clients the ability to link bank accounts to cryptocurrency holdings.

While some might see this move as one of traditional banks embracing bitcoin, really, it heralds a new shift in the evolution of cryptocurrency into the greater fintech space.

Skandiabanken announced its intentions this week to let users connect a bank account with a Coinbase account, allowing users to view their cryptocurrency balances within the banking app.

The app allows users to view their holdings, just as they would other investments, and, for now, the functionality does not include the ability to buy and sell cryptocurrencies. The bank has stressed it does not yet view bitcoin as a currency, but instead another asset class.

This is likely the beginning of a trend that sees bitcoin merge with broader fintech trends of offering customers innovative, if not niche services.

Unbundling banking

Around the world, mobile banking is taking a lead over branch-centered activity – in Norway, for example, 91% of the population access online banking sites.

The proliferation of fintech services that ‘unbundle’ traditional banking functions, combined with the maturing of the internet-first generation, are accelerating this trend.

What’s more, the European Revised Payment Services Directive (PSD2) activates in 2018. The directive mandates that banks have to share customer data with third parties through APIs, which could include access to cryptocurrency services.

So, the combination of online banking, fintech services and open APIs point to a blurring of boundaries between traditional and alternative finance.

New banking institutions such as Skandiabanken, are taking steps towards accepting bitcoin and its altcoins as credible assets. Should this trend continue, cryptocurrencies could end up becoming a more firmly consolidated feature of the new fintech landscape.

This will place even more pressure on legislators to come up with comprehensive plans for regulating a new asset class.

It is also likely to encourage development of the next generation of cryptocurrency-related services.

And while this doesn't mean that bitcoin and similar assets are becoming mainstream, it shows that financial disruptors can start to change a narrative that's been stagnant for decades, and that cryptocurrency is here to stay in the large fintech ecosystem.

Piggy bank image via Shutterstock