Saif K.
12:44 1st Sep, 2022

What is Crypto Banking? A Beginners Guide

Let's break down Crypto Banking. We all know what cryptocurrencies are, and most of you reading might be invested in them too.

Traditional banks and banking system has existed for a long time. Fundamentally bank is a central body licensed to hold the cash or credits on behalf of its users.

But in this era of web 3 there is a new concept called ‘Cryptocurrency Banking’. Crypto banks have taken the world by storm by encouraging users to use these banks to store their crypto tokens and smart contracts.

In this article let's explore the world of crypto banks, how crypto baking works and the benefits of crypto banking.

Crypto bank Zelta

What are Crypto Banks?

Crypto banks represent a revolutionary departure from traditional banks. They empower users to save, earn, and trade in cryptocurrencies, distinguishing them from their fiat-focused counterparts.

Crypto banks center their operations around digital currencies like Bitcoin and eschew traditional fiat currencies.

What sets crypto banks apart from crypto wallets is their comprehensive range of services, akin to those offered by traditional banks, including bank statements and debit/credit cards—a feature typically absent in most crypto wallets.

The question that naturally arises is, why haven't traditional banks transformed into crypto banks?

The primary reason behind this reluctance is the desire to prevent confusion among investors.

Traditional banks are renowned for their security measures and insurance provisions, while crypto banks do not offer such protections.

Need for Crypto Banks

The crypto industry's exponential growth, with an ever-increasing number of users and investors, has ignited a need for new financial solutions.

Zelta crypto banks

As billions of dollars flow into the crypto space, individuals seek more autonomous ways to manage their digital assets. This demand for greater user independence in navigating the crypto universe led to the emergence of crypto banks.

While only a handful of these banks exist, they are working diligently to fulfill this need. Let's delve deeper into how crypto banks operate.

How Crypto Banks Work?

Crypto banks rely on a public ledger, much like blockchain technology, to record assets owned by different investors and document transactions.

Crypto Bank Zelta

These banks employ mining, where the cryptocurrency holdings of users are converted into chains of equivalent value. This conversion process is facilitated by computer machines that solve complex mathematical problems to generate these digital coins.

Benefits of Crypto Banking

There are huge benefits associated with crypto bank accounts helping various investors and crypto enthusiasts leverage the value of their investment. Benefits include:

Financial Inclusion: The first and foremost advantage of crypto banks is ensuring the worldwide availability of funds and cryptos. On one side, where various traditional banks fail to serve their customers across the globe, crypto banks have the capability to help their customers from any country.

24x7 Access to the servers: The best aspect of being on the blockchain network is that one can access their crypto wallet anytime and anywhere. This all time access beats traditional banks who are bound by fixed operational hours.

What are the risks of Crypto Banking?

No matter how revolutionary a new concept may sound it always comes with its own set of risks. Crypto banks too come with their own set of risks. These include:

Insurance of Crypto Banks: Cryptocurrencies are decentralised and have no insurance backing them. Because of which if the company you bought your Crypto from goes belly up then the funds too are lost completely.

However this flaw also presents itself as an opportunity for crypto assets getting insured in the future.

Volatile Market conditions: The highly volatile cryptocurrency market makes the investment as a whole risky. Thus, one needs to be very careful when trusting a crypto bank.


Cryptocurrencies have undoubtedly dominated market discussions, carrying immense potential.

Crypto banking represents a novel concept poised to make a substantial impact over time. As this exciting evolution continues to unfold, crypto banks have the potential to redefine how we manage and interact with our digital assets.

However, users must navigate these novel financial institutions with caution, considering both their remarkable benefits and inherent risks.

The world of crypto banking is at the forefront of reshaping the financial landscape, and its journey is one worth watching closely.

(Also read: What are Blockchain Forks?)

Image Credits: The Money Mongers; news.bitcoin.


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