The intersection between cryptocurrencies and traditional banking is a murky one. By definition, cryptocurrencies were built to act as alternatives to traditional banks and make it easier for people to access financial services and more. However, crypto could also benefit a lot from traditional banking.
Several visionaries have arisen, looking for a means of combining these two and providing even greater value to their customers. This past week, it appears that one of those visionaries is making strides.
Banco Azteca’s Incoming Milestone
On June 27, Ricardo Salinas Pliego, Mexico’s third-richest man and one of the country’s biggest business magnates, confirmed that he is pushing to bring crypto services to his bank.
Pliego is the chairman of Grupo Salinan - a group of companies withholding interests in several sectors, including financial services, telecommunications, and media. His bank, Banco Azteca, is one of the biggest and most popular in Mexico. As Pliego’s tweet explained, he believes that Bitcoin should receive mass adoption, and his bank will be working to make that happen.
The move will undoubtedly be a big one. Banco Azteca, which earned $2.54 billion in 2020, has branches operating in Mexico as well as Guatemala, Panama, Peru, and Honduras. It primarily offers credits for goods, small business and personal loans, mortgage services, credit cards, and more.
It seems highly unlikely that Banco Azteca will take Bitcoin and only serve customers in one region. So, the company is undoubtedly at an inflection point. If it accepts Bitcoin, several million customers in several countries will be able to access the asset. At the same time, the bank itself will be the first crypto bank in Mexico.
Not a One-Step Process
Pliego himself has been a fan of crypto for a while. Last November, the billionaire pointed out on Twitter that he had a tenth of his liquid investment portfolio in Bitcoin. In a video captured in “a Latin country” depicting the ineffectiveness of traditional finance, Pliego explained that paper money is worthless, and cryptocurrencies provide a great way to diversify your portfolio.
“Today I recommend THE BITCOIN PATTERN, this book is the best and most important to understand Bitcoin. Bitcoin protects the citizen from government expropriation. Many people ask me if I have Bitcoins, YES. I have 10% of my liquid portfolio invested,” Pliego added in a recommendation tweet.
The billionaire doubled down last week, explaining on Twitter that Bitcoin is a much better investment for regular people than fiat currencies or alternative assets like gold. Replying to a tweet from MicroStrategy chief executive Michael Saylor, Pliego explained that Bitcoin is much better than gold because it is more profitable and easier to transport than physical gold.
Despite this, Pliego conceded that he doesn’t know whether Mexico can follow in the footsteps of countries like El Salvador that might be looking to move to the Bitcoin standard. Admittedly, a move like that of El Salvador might not necessarily be easy. With a GDP of $27 billion in 2019, it will be pretty easy for a country like El Salvador to switch and become crypto-friendly.
Mexico’s GDP in the same year was a staggering $1.29 trillion. With such a large economy, moving into crypto won’t be easy. However, baby steps like those that Banco Azteca might be treading will be important in getting the broader economy into crypto at the end of the day.
Crypto-Banking Integration Happening in the United States
Crypto fans in the United States might look at these developments and believe that it will take time for the country to join the party. However, there is a lot of crypto-banking integration going on in the country as well.
In February 2020, Avanti, a crypto bank founded by former Wall Street executive Caitlyn Long, got a charter to operate in Wyoming. Long confirmed the development in a series of tweets, explaining that Avanti will be able to help customers to custody cryptocurrencies. While there are a lot of regulatory constraints to its operation, Avanti marked a significant milestone for the United States.
Then, in September, Kraken - one of the country’s largest crypto exchanges - became the first to receive a charter to operate as a bank in the United States. Per an announcement, Kraken Financial - the name of the new financial institution - will be headquartered in Wyoming. It will provide improved banking services to customers, especially those who will require crypto assistance.
For now, progress with crypto-bank integration in the United States will require improved regulation. Wyoming has been able to crack this by providing crypto-friendly regulations, but other states and Washington will need to get in line as well.