Crypto Banks Will Bring Cheaper Services In The Future: Report

The competition among crypto companies is changing – and all of this makes financial services more accessible and cheaper. According to a popular crypto researcher known as Hasu and his latest analysis, crypto banks will bring cheaper services in the future.

While coming from different directions, all cryptocurrency companies share the same goal of eventually becoming crypto banks. The analysis written by Hasu and posted on Deribit’s blog is in the crypto news today.

The banks’ leading indicator of success will be AUM (asset under management) as the report shows, which is monetized through financial services. The next few years before us will also see a stiff competition between crypto exchanges, wallets and custodians moving from horizontal expansion where they have been accumulating assets – to vertical integration which will allow them to do more with existing assets.

As the researchers say, crypto banks will bring cheaper services and these services will also become “more widely accessible and cheaper than ever before.”

While exchange valuations soar, crypto is an exceptionally dangerous industry for incumbents to rest on their laurels. The mix between high customer mobility, regulatory arbitrage, and a purely digital offering creates an innovate-or-die environment for businesses. pic.twitter.com/ehkp6cyZhB

— Hasu (@hasufl) January 2, 2020

What is very interesting at the moment, as Hasu finds, is that a race towards consolidation and becoming the first crypto bank is happening. Exchanges and their competitors are hurrying to adopt and democratize access to services known from traditional finance and “this will happen much faster than anyone expects” he said.

“The three low hanging fruits are (1) interest accounts, (2) payments, and (3) tax services.”

These features are what the analysis predicts to be standard offering for every spot exchange in the next few years. The concept of crypto banks is radically evolving and can be a gateway to keep existing users and attract new ones. The yield, as researchers say, would come from three sources including staking, lending in exchange-internal money markets and exchange external-lending and liquidity provision.

Additionally, the concept of crypto-backed Visa and Mastercards could finally take off. We could see exchanges investing a lot more into tax services too – mostly because of the uncertainty around taxes and how to calculate them.

All in all, major exchanges are expected to step up to the concept of crypto banks soon and announce a new range of features and platforms intended to diversify their services and attract new customers in 2020.