Dive Brief:

• Fiserv, the payments processing giant, is partnering with the New York Digital Investment Group (NYDIG) to offer customers Bitcoin services, according to a Wednesday press release.

• With the integration of the two companies' services, banks and credit unions will be able to facilitate their customers' buying, selling and holding of Bitcoin as demand for cryptocurrency services rises among U.S. consumers. Nearly 46 million Americans, or 22% of the adult population, owns Bitcoin, according to a January survey conducted by NYDIG, and that number is expected to grow.

• Fiserv and NYDIG are working with Irvine, California-based First Foundation Bank to bring the new service to market. “If our industry is truly committed to innovation and the financial future of our clients, we need to lead in this area and help create a secure and trusted platform for using Bitcoin for everyday financial matters," First Foundation CEO Scott F. Kavanaugh said.

Dive Insight:

Fiserv's deal comes a month after NYDIG inked a Bitcoin services agreement with fellow payments processor FIS. Under that tie-up, FIS invested an undisclosed amount in NYDIG through its investment arm, FIS Ventures.

“Interest in cryptocurrency, and particularly Bitcoin, has skyrocketed over the past several years, to the point that Bitcoin investing is now a commonplace activity,” Fiserv Chief Digital and Data Officer Byron Vielehr said in Wednesday's press release. “People continue to turn to financial institutions as a central place to manage their financial activity, and being able to offer this capability will help position banks and credit unions at the forefront of their customers’ financial lives.”

An increasing number of big banks are connecting their customers to Bitcoin services, as well. BNY Mellon announced in February it would hold, transfer and issue cryptocurrencies on behalf of its asset-management clients. Goldman Sachs relaunched its crypto trading desk in March. State Street and Citi each announced this month the launch of new units focused on digital finance. And Wells Fargo said it planned to offer its crypto investment platform to wealthy clients beginning this month.

Customers have continued to invest in cryptocurrencies despite their volatility. Bitcoin, for one, saw its value drop to $3,850 at the start of the COVID-19 pandemic before ballooning to nearly 17 times that worth by April of this year. However, it has since lost nearly half of that value. 

That's been reasoning enough for the Basel Committee on Banking Supervision and the Bank for International Settlements to issue reports assailing the tokens.

But NYDIG said “banks can play an even more critical role in the evolution of Bitcoin by making it accessible in novel ways."

NYDIG found that 81% of the consumers would move their Bitcoin holdings to their current bank if it had a secure  storage option, according to a January survey of 2,184 U.S. consumers. Also, 71% of surveyed consumers said they would switch their primary account to a bank that offers Bitcoin trading and storage services, while 81% said they would be interested in buying Bitcoin if their banks offered it. 

“We think it is safe to say that the Bitcoin ‘train’ has left the station. But the passengers want banks — their trusted financial providers — to get them on board,” NYDIG said. “The data shows that not only would consumers feel more comfortable buying and holding their Bitcoin with a bank, but that they desire bigger and bolder opportunities.”

Through the Fiserv-NYDIG service, financial institutions can eventually expect to offer customers a Bitcoin-based rewards program, the companies said.