The Crypto Banking Challenge
As cryptocurrency adoption continues to grow exponentially so does the number of firms holding crypto assets. These are the “crypto-native” enterprises.
These enterprises have crypto assets on the books for OPEX, CAPEX, or strategic investment purposes. However, the market doesn’t provide a product suite that allows enterprises to do this effectively from one place.
Businesses dealing with crypto assets on a regular basis need to have transaction workflows, multi-currency capability, multi-signature support for co-signing transactions, role management, and multiple factors of authentication for increased security.
To manage crypto treasury services or day to day business operations, enterprises need to be able to:
Store assets safely: security of funds is the number one priority in an enterprise environment. The enterprise may need to be compliant with complex regulations, as well as dealing with various workflows and permissions for multiple users within the organization.
Example - a small amount of funds can be accessed by a single employee, but from the same wallet a larger amount could only be accessed by the approval of all of the CxO managers - which requires a multi-signature solution.
Manage payments seamlessly: crypto payments can be faster and cheaper than wire transfers, so it needs to be easy to transact on day to day basis:
Example - sending salaries to employee’s crypto address without the technical hassle and double-triple checking of complex addresses, tracking balance activity through a clearly understandable UI, paying vendors’ and suppliers’ expenses.
Earning interest: idle crypto assets under management should provide a yield for the asset holders
Example - financial institutions that have significant assets under management could miss opportunities to gain yields from those assets and solely rely on their price appreciation. Treasury solutions need to facilitate access to interest-earning opportunities through the DeFi space.
A platform that provides all of these required features could be described as a “crypto banking platform” and should provide features analogous to traditional business banking.
However, there is no incumbent platform that has all the required features. Current solutions lack these ever-important features for enterprise clients and have serious limitations around security, accessibility, single user systems and governance.