What is a crypto bank account?
Initially, private persons started to own bitcoin and stored it in their own ‘accounts’. In a technical sense, a BTC (or in general a crypto) account is LIKE a bank account:
- It has a unique identifier that belongs only to you, third parties can send to and receive from the stored assets in that account.
- It can store value (of money) and you alone can access it (as long as you and you alone have the password).
- It is an accounting class that must be reported…in theory, and by law.
On the other hand, it is very much UNLIKE a bank account
- The account numbers are universal, not dependent on any bank (e.g. the three first numbers do not define the branch in which you opened the account), and are managed by thousands of unknown computers around the world.
- The account itself does not identify the owner and one owner can have a crazy amount of ‘bank accounts’ free of charge or monthly costs. If each grain of sand was one whole Earth with 7.5 billion inhabitants (each), all of those endless amounts of people could have 3.5 billion unique BTC addresses each. I say, we probably never run out of numbers.
- Since we do not know who the owner is, anyone (or groups) could be the owner.
- They do not offer protection from theft or deposit insurance like banks do.
For more details check out this article about blockchain bank accounts.
…and this brings us to the topic of this article:
Can a company have a crypto business bank account?
If a person of a company can open a crypto account and the account - by design - is not linked to an entity, well, nobody can prevent our guy from opening an account and claiming that it is a company account. If I download the BTC chain manager application on my laptop, I can create an address, and transfer value there from my company’s bank account. Naturally, this is not as easy, but totally possible.
Can I use my business account to buy cryptocurrency?
You must find a financial service provider (neo-bank) that has the license/business target to serve companies and crypto at the same time.
In real life, one needs an intermediary service to convert fiat money to crypto, move the money through the SWIFT network (send/receive USD/EUR…), and pay through a bank card provider (VISA, EC/MC…). Daily business life needs a more complex system of services other than a rogue computer with 3.5 billion addresses.
There are many online and offline (banks) companies that today offer you financial services (holding, sending, receiving, converting, investing, etc.) and cross border payments.
- Some are specialized in private services (like Revolut),
- Some are focusing on business clients only (like B2BPay / Narvi Pay)
- While some manage both (like Wise).
They are operating under different jurisdictions, and by law have very different licenses to operate (and not to operate). E.g. one of my providers was able to send fiat money to bank accounts for a while until it lost its license and suddenly could not. Some providers can receive and send crypto and wire transfers, others may not, or not in the currency you want. You must always find out the use-cases that your business needs and screen the provider company for the steps in the process.
How to set up a crypto business bank account?
Once you found a financial service provider who has the license to serve companies and crypto at the same time, you must set up a business account: You need all your company documents and present them (usually online) to the account opening and onboarding procedure. It involves a legally required KYC (know-your-client) procedure at the financial provider. You may also need to present your signature sheet for the company, your ID, proof of address (like a phone bill), and very likely a live photo or video proof of existence check will be carried out. It all happens in mere minutes, and you get your account up and running usually in a day or so.
Since it is a business account, you should inform your accountant and send them monthly balance documents that they can work with. The legal framework keeps changing around crypto, but for now, it is classified as an asset class (not cash), so accountants can work with it easily.
How to send money to your crypto bank account?
You are ready to go! Only, your account is empty now. Depending on your provider, there may be one of four ways to upload your account with money.
- cash deposit (very unlikely…near zero chance),
- crypto transfer from another account,
- fiat transfer through SWIFT or SEPA network (normal bank),
- bank card deposit (use your existing VISA or ECMC card, pay and get your own money)
How to transfer crypto to a bank account?
The same is true for reverse transactions. You may want to send your crypto to your fiat bank account in a traditional bank (make USD from BTC). Some banks already offer crypto account services, but mostly they do not. In those cases, you have to convert the crypto to fiat (USD, EUR…) first, then send that amount through traditional means (SWIFT and SEPA). Conversion and transfer / transaction fees apply of course.
Once you have money to spend, you can buy other cryptocurrencies (BTC, ETH, ADA, USDT, etc…) in your web or mobile app. The limitation of selection is dependent on your service provider. In some cases, you may want to buy something rarely accessed and you may have to use another application just to do that on another blockchain, like Tron or Metamask. Once you buy them, it becomes like a piece of item in accounting that has a market value and can appreciate and depreciate over time and make you enjoy profit or suffer losses.
How to choose a Crypto business bank account?
Checklist before selecting a financial provider for a business account:
- Well….do they provide business account registration?
- Can they work with multiple fiat currencies (do you only need USD, or EUR…or else?)
- Can they issue an IBAN account to you? (are they on the SWIFT / SEPA network, can your clients send you and receive from you wire transfers at all?)
- Do they list the cryptocurrencies that you need? Will they?
- Can they transfer cryptocurrencies on different blockchains? (Revolut can store, but cannot send/receive crypto).
- Can they issue a VISA/ECMC card linked to your account? (Do you want to spend from the account like that?)
- Certainly, check the setup, transaction, and monthly fees that they may charge you…just like with any traditional bank.
- 1. What is a crypto bank account?
- 2. Can a company have a crypto business bank account?
- 3. Can I use my business account to buy cryptocurrency?
- 4. How to set up a crypto business bank account?
- 5. How to send money to your crypto bank account?
- 6. How to transfer crypto to a bank account?
- 7. How to choose a Crypto business bank account?
- 8. Checklist before selecting a financial provider for a business account: