As digital assets and traditional finance continue on path towards mutual integration, many companies from across the financial landscape have begun setting up the infrastructure to help large scale financial institutions offer crypto-enthused financial products and services. As a bitcoin and digital assets company that offers technology and financial services for institutional investors, NYDIG is a major player in the widespread incorporation of crypto-infused banking.
The company is in the process of launching its Bitcoin savings plan, a B2B financial product that would allow individuals to directly invest in digital assets via their already existing mobile banking apps. Yan Zhao, President of NYDIG, spoke with deCashed at the New York Stock Exchange last week about this new product, cryptocurrency’s role in the future of consumer banking, and how the notion of widespread use of digital assets at a consumer level is much closer than it may appear.
“The genesis here is really there’s this whole trend about getting paid in Bitcoin,” said Zhao, when asked about the most immediate impact digital assets have in traditional finance. Discussing NYDIG’s ‘Bitcoin savings plan’, she spoke about the idea of not just getting paid in digital assets, but how companies like NYDIG are providing legacy banks the infrastructure to give their customers digital asset buying power via the bank’s own platform.
“Let’s say five percent [of a paycheck] every month, allocate it to a bank account that is powered by [another fintech] with our front end, and every time that cash hits a bank account, it automatically converts it to Bitcoin,” said Zhao. “So you set it, forget it, and you never have to worry about it, and every month you accumulate a little bit more. We call it a savings plan because it is a savings plan. Save away for a rainy day in an asset class we believe in, in a way that is secure and easy to access.”
Zhao highlighted two key components to any successful financial product, simplicity and efficiency. She used these two principles in an explanation of why NYDIG’s Bitcoin savings plan is a no-brainer for banks looking to incorporate digital assets. “You don’t have to download a whole new app, you don’t have to upload your selfie, you don’t have to wait and transfer money back and forth, it’s all right there.”
When asked about how digital assets can be incorporated in traditional finance, Zhao spoke on how many institutions have already incorporated crypto-induced ideas via fintechs into their suite of potential products.
“Fintech is all about making financial services safe and accessible in a safe and secure fashion, [accessible] for more and more people, all while making it easier, cheaper and faster,” Zhao said. “How we approach [ideas] from a digital asset perspective is we ask ourselves, ‘how do we give access to bitcoin and digital assets in ways that are faster, cheaper, more integrated with how people live their lives’?”
Inside all this innovation through implementation of new and improved financial products, Zhao is well aware of the government’s lack of regulation when it comes to crypto’s recognition as a legitimate part of the US economy. According to her, NYDIG is ready for the feds to step in to the space, as the company has been abiding by the laws in place outside of crypto as a basis for possible regulations that are to come.
“People say crypto is so unregulated, and you know, that’s not actually true,” said Zhao. “There are financial services for things like ‘what is a security’, and ‘what products can you offer to retail consumers?’ Regulation is out there. Even though those regulations don’t literally say the word Bitcoin, we believe from the very beginning that you can analogize that if you’re offering a financial service, which Bitcoin is, it’s a financial product.”
Zhao embraced specific regulation on digital assets, and reiterated that regulation would not be detrimental to her company’s business model. “Of course, there could be regulations that come out that are going to be more specific and we welcome it, we think it’s going to be fantastic. In the meantime, we’ve really taken a practical approach to this and that’s how we’ve done things, so we feel very comfortable with that approach.”
With New York etched in the company’s acronym, Zhao spoke about the city’s future role as the financial hub of the world. When asked about being a New York-branded company in an industry that is currently playing tug-of-war with where its geographic focal point will be, Zhao believes that New York can outlast cities like Miami and Austin in the race for modern finance’s longterm landing spot.
“I think innovation can happen in lots of different places all at once, and frankly we welcome innovation no matter where it is, so I think it’s better for the entire digital asset economy,” said Zhao. “As a proud New York company, right now it feels like digital assets and crypto are so much different than traditional financial services, I think that it’s because it’s still relatively new.”
Zhao gave a prediction on the future of both New York as a financial hub and the merging of crypto and banking in one swoop. “I expect traditional finance and crypto currency industries to exist harmoniously together, deeply integrated in a lot of ways, for example being able to buy bitcoin through your banking app,” Zhao continued.
“As long as financial services are a big part of the world,” I think New York is going to remain a big part of the financial world.”