Independent Banker - November 2022 - 60

" Having a focus on understanding
[cryptocurrency] innovation and its impact
on clients' needs will be critical to the future
success of all banking and financial services. "
-GARY SMITH, EIDE BAILLY LLP
division that handles investments,
then it's more feasible to offer
cryptocurrency. "
4
Should
community banks
get involved in
cryptocurrency?
When Chris Miller, director in the
channels practice at Cornerstone
Advisors in Scottsdale, Ariz., and his
team talk to community bankers who
want to get into cryptocurrency " full
force, " he typically asks the question,
" Why and how do you want to do it? "
" If the bank doesn't have an
investment arm, then getting into
cryptocurrency is probably not the
place to start, " he says. " But if the
bank already has a wealth advisory
Miller and his team recommend
a four-pronged strategy, starting
with educating board directors on
the basics of cryptocurrency. Then,
if the bank is interested in offering
cryptoassets as investments, the team
educates the board on potential digital
banking partners, like NYDIG, that
enable the buying, selling and holding
of cryptocurrency on behalf of the
bank's customers and gives the bank
an opportunity to share in the revenue
of those transactions.
Next, Miller and his team discuss
crypto payments-enabling the buying
and selling of goods and services with
cryptocurrency held at the institution.
" However, if a person is going to
purchase things with a cryptocurrency
debit card, they almost need a degree
in statistics to determine the tax
implications, " Miller says. " The SEC
currently deems cryptocurrency
as a security, so if someone uses
cryptocurrency to purchase something,
this is where that statistics degree
will be required to understand the tax
implications of this transaction. "
Banks could also offer crypto
rewards. Instead of cash back on debit
or credit card purchases, they could
offer crypto back, he says.
Likely a " far off " idea that would
require most community banks to
gain more knowledge, the fourth
prong would be lending against
cryptoassets, somewhat similar to
what banks now do for stocks and
CD-backed loans.
" For a bank to feel comfortable
making a $50,000 loan, they might
need $500,000 in the borrower's
cryptocurrency account to back
that, " Miller says. " Some institutions
are doing that now, but it's a very
risky position to be in with the
current market. "
Quaranta believes it's an opportunity
community banks should take
seriously. " Community banks need to
understand their client base and the
amount of transaction volume and fee
income that could potentially be missed
by not enabling crypto purchases
within the institution, " he says.
81%
Source: NYDIG
of people would
be interested in
buying bitcoin
from their bank
if the service
were available
60 Q ICBA Independent Banker Q November 2022

Independent Banker - November 2022

Table of Contents for the Digital Edition of Independent Banker - November 2022

Table of Contents
Independent Banker - November 2022 - Intro
Independent Banker - November 2022 - Cover1
Independent Banker - November 2022 - Cover2
Independent Banker - November 2022 - Table of Contents
Independent Banker - November 2022 - 2
Independent Banker - November 2022 - 3
Independent Banker - November 2022 - 4
Independent Banker - November 2022 - 5
Independent Banker - November 2022 - 6
Independent Banker - November 2022 - 7
Independent Banker - November 2022 - 8
Independent Banker - November 2022 - 9
Independent Banker - November 2022 - 10
Independent Banker - November 2022 - 11
Independent Banker - November 2022 - 12
Independent Banker - November 2022 - 13
Independent Banker - November 2022 - 14
Independent Banker - November 2022 - 15
Independent Banker - November 2022 - 16
Independent Banker - November 2022 - 17
Independent Banker - November 2022 - 18
Independent Banker - November 2022 - 19
Independent Banker - November 2022 - 20
Independent Banker - November 2022 - 21
Independent Banker - November 2022 - 22
Independent Banker - November 2022 - 23
Independent Banker - November 2022 - 24
Independent Banker - November 2022 - 25
Independent Banker - November 2022 - 26
Independent Banker - November 2022 - 27
Independent Banker - November 2022 - 28
Independent Banker - November 2022 - 29
Independent Banker - November 2022 - 30
Independent Banker - November 2022 - 31
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Independent Banker - November 2022 - 33
Independent Banker - November 2022 - 34
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Independent Banker - November 2022 - 60
Independent Banker - November 2022 - 61
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Independent Banker - November 2022 - 64
Independent Banker - November 2022 - 65
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Independent Banker - November 2022 - Cover3
Independent Banker - November 2022 - Cover4
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