LONDON—Bitcoin exchange Coinfloor will now offer fiat bank accounts to companies that handle cryptocurrencies. This is important because crypto companies have long struggled to find banking partners.
To do so, it has partnered with Enumis, an institution that enables other businesses to provide financial services, including current accounts, debit and credit cards. It is authorized by the non-governmental Financial Conduct Authority—which oversees the U.K.’s financial services industry.
Coinfloor, is offering this banking service for U.K.-based companies, which will use the Faster Payments scheme, offering quicker deposits and withdrawals. This initiative was launched in 2008 to reduce payment times between bank accounts. But, the main effect of the new service will be that crypto businesses finally have a way to store their funds in fiat money.
“Crypto-focused businesses are growing at a steady pace, but until now, no reliable banking facilities have existed to help them manage fiat and crypto finance operations in an effective manner,” Obi Nwosu, CEO of Coinfloor said, in a press release.
Banks have traditionally been unwilling to work with crypto companies and let them open bank accounts due to fears over money-laundering. Due to this, many companies resorted to using shady Panamanian bank Crypto Capital—which we’ve covered extensively here. In fact, this situation got so bad, it left crypto exchange Bitfinex with an $850 million black hole in its finances.
“We hope that this offering...will help the community of crypto businesses overcome their financial limitations and drive the crypto economy forward,” he added.
The exposure of many crypto companies to the volatility of cryptocurrencies—due to not being able to store their value in fiat money—led to sudden funding crises and widespread layoffs. Ironically, this fiat banking service might save crypto companies from themselves.