The great cryptocurrency has begun

For crypto companies, the change in atmosphere is a blessing. Although they have relatively few problems accessing overseas bank accounts (usually in the Cayman Islands or Switzerland), they usually cannot earn deposits or trade seamlessly with trading companies in the U.S., and sometimes they incur high account fees. They also do not benefit from deposit insurance from the Federal Deposit Insurance Company, which guarantees up to $250,000 per account holder.
Sources said that while some big-name banks, such as JP Morgan, are trying to use crypto technology internally, many banks are still reluctant to provide accounts to cryptocurrency businesses. “The banking that John Doe has heard about has nothing to do with cryptocurrencies,” said David McIntyre, COO of DoubleZero, a startup that developed the network infrastructure of Crypto Networks.
But this creates a vacancy for smaller fintechs to expand the deposit base by mining customers in the cryptocurrency industry. “Basically, the founders are growing with Mercury or Meow these days,” Khan said. “Meow has been very active in engaging with the founders when he saw the fundraising announcement.”
These fintechs tend to market themselves with crypto advances (providing comprehensive services such as Stablecoin Transfers), while fewer of them are frustrated. Meow’s CEO Brandon Arvanaghi, about 30, is a bit like a Tiktok account in his LinkedIn profile and comes with a video short series.
“These U.S. fintech technologies are much better than random bank X in the Cayman Islands or Switzerland. They have a better platform, better support – win everything,” McIntyre said.
Mercury refuses to accept an interview in this article. Meow and Brux did not respond to interview requests.
In fact, these fintechs act as a software layer on traditional banks holding U.S. licenses; they handle user interfaces and customer acquisition, while partner banks manage deposits. Meow works with Grasshopper Bank; UK’s Dorn and Mercury work with several banks. The model was widely adopted in the United States during the 19th pandemic, and the model forced banks to find ways to attract customers digitally.
“In the best form, it’s a way for banks to access better technology,” said Craig Timm, senior director of Acams’ anti-fines. Timm previously worked as a financial crime specialist at Bank of America and the U.S. Department of Justice. “For fintech technology, it allows them to focus on what they are good at – building, marketing, attracting new customers without having to get a bank license, which can be difficult and expensive.”
However, the arrangement also generally requires fintech to follow basic rules set by partner banks, including parameters around the types of clients that are allowed to serve. A spokesman told Wired that Mercury could not provide an account to a cryptocurrency company that held customers’ funds.
“They put their skin on someone else’s bank,” McIntyre said. “They have to comply with the underwriting requirements, regulations and determination of the bank for the clients they want to accept.”