- NCR will handle all trade-related activities while NYDIG will take care of the crypto custody.
- The partnership will provide direct competition to existing crypto exchanges while giving customers a seamless banking-like experience while dealing with their crypto holdings.
Digital asset management firm NYDIG has joined hands with payment giant NCR to provide Bitcoin purchase service to 24 million banking customers across 650 U.S. Banks. NCR will facilitate community banks with a mobile payments infrastructure that provides a seamless and secure crypto trading facility to their customers.
The Atlanta-based payment firm NCR said the decision to provide this service comes amid rising demand from banks and credit unions. Instead of going to outside exchanges to make crypto purchases, these firms want something in-house and seamless.
Speaking about this development, NCR president of digital banking, Douglas Brown said:
We’re firm believers in the benefits of crypto and the strategic application. And that’s true for our banking relationships, as evidenced by NYDIG, and across retailers as well as restaurants and the like.
With NCR’s service, the banking and credit union customers will be able to buy bitcoin/crypto directly through their existing accounts. This move also puts the payments giant in direct competition with the existing crypto exchanges.
On the other hand, NCR’s partner NYDIG will take care of custodial services for crypto purchases. In a word to Forbes, NYDIG President Yan Zhao said:
A lot of these banks have seen that one of the biggest outflows from there depositors is moving money from the bank to exchanges like Coinbase. And so that’s part of why banks are so excited to have this capability for themselves and for their consumers.
Project Implementation and Crypto Custody
As forementioned, NCR will make it absolutely hassle-free and seamless for its customers to buy, sell, and trade Bitcoin and other digital currencies directly from their mobile application. The purchase will allow customers to feel like they are directly working with banks through the registered accounts. On the backend, NYDIG will work as the custodian of the actual assets.
Besides, NCR clients also don’t need to worry about the custody of the private keys that give customers access to cryptocurrencies. NYDIG said it will hold the exact amount of assets that its clients buy in a cold-wallet environment. “Every dollar of customer bitcoin is actually bitcoin that is held in custody, in trust, for the customers,” says Zhao.
Moreover, with the existing system, all Bitcoin and crypto purchases are sourced from OTC desks. Thus, the purchaser buys the crypto at a marked-up price depending on trade size and other factors. However, NYDIG will sort this out with a per-month-per-user fee from the bank. As per the digital asset management firm, this will considerably reduce the transactions costs in the crypto market. NYDIG head of bank solutions, Patrick Sells said:
I think you’ll see cheaper transaction fees through the banks than what you have today in the marketplace. But the banks do get to determine what they want that transaction fee to be.
NCR’s digital banking president Douglas Brown said that phase two of the implementation will see the payment giant eventually taking up custody for its clients. The primary goal of NCR is to bring crypto spending and use among the masses.
“We have broader ambition to do a multitude of things with crypto that will extend into our multivertical markets, retailers and restaurants,” says Brown. “And then other capabilities oriented around digital banking.”
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