In early December, Bankers Helping Bankers hosted its first event for community bankers throughout the country since the platform launched in October. The hour-long educational session featured Ben Soppitt, CEO of Unifimoney, a cryptocurrency trading application, in conversation with Independent Bankers Association of Texas President and CEO Christopher Williston about the basics of cryptocurrencies and why community bankers should pay attention to what’s happening.
Here are five takeaways for community bankers from the Crypto 101 discussion between Soppitt and Williston:
- The first academic paper around blockchain technology, which enables many cryptocurrencies, was written in 1982 by mathematicians to solve a global historical problem. It was intended as a mathematical means to enable trust among communities that do not trust each other.
- Retail investing has grown from 10 percent of the total volume of investible assets to approximately 35 percent over the past two years. This growth of retail investment has contributed to the overall public interest in cryptocurrency investment and trading. This vast retail investment also offers community banks the opportunity to connect with a growing area of interest in their customers’ lives.
- “If the role of community banks is to help communities protect and grow their wealth, then it is a natural extension to extend that service layer into a more holistic wealth management function, of which cash and loans are a part, but it also includes access to other forms of investing and money management—particularly digital forms,” Soppitt says.
- When users buy cryptocurrency through online exchanges, they are typically paying a large premium (5 percent to 10 percent) to fund accounts. This premium makes spending of cryptocurrencies on everyday needs irrational and keeps cryptocurrency in the role of a speculative investment. As market forces drive these premiums down, the use cases of cryptocurrencies will expand and ultimately impact remittances, B2B payments and other services typically reserved for the banking system.
- Community banks can offer custodial services for cryptocurrency to help customers securely hold their digital assets. This activity has earned some regulatory approval by some state and federal regulators.
“There is massive public adoption of cryptocurrency trading,” says Dave Mayo, FedFis CEO and co-founder of Bankers Helping Bankers. “This has community bankers naturally wrestling with what, if anything, their bank can do to connect with their current or potential customers’ interests in cryptocurrency. Community bankers do not want to repeat what happened when P2P payments emerged via Venmo and other platforms—when a massive change in customer behavior occurred and almost bypassed community banks.”
A recording of the Crypto 101 session is now available for viewing inside the Bankers Helping Bankers platform. Also added to the site is a new section for cryptocurrency research and understanding, which includes:
- Cryptocurrency terms and definitions;
- A listing of various coins currently being traded, along with market analytics; and
- A listing of banks that are currently involved in cryptocurrency in some way.
Access to Bankers Helping Bankers is now available to community bankers across the country. If you have not already registered to participate in the program, you may do so by using this web form. Requests for access are generally accommodated within one business day.