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Private Banking for Crypto Investors

When you hear the phrase ‘private banking’, you will probably think of exclusive banking opportunities available only to Old World families that have been rich for centuries. But the truth is that any wealthy person can gain access to these opportunities (that are exclusive indeed) including the one who has made his or her fortune by mining cryptocurrencies or trading in them.

Let us discuss the main advantages that private banking can bring to a crypto business.

Crypto and private banking

Banks will become obsolete one day … in the future

Many contemporary entrepreneurs and especially those that are dealing in digital products such as cryptocurrencies, for example, believe that digital platforms are going to substitute traditional banks in the future. Without doubt, they do have a point here and banks may disappear one day. Today, however, banks are still there and any business has to have a bank account in order to be functional.

If you are engaged in a crypto business, which is a recent invention, you may think that you should apply for services to a digital bank or a neobank, as these also started appearing quite recently. However, the financial institutions of the new format are actually reluctant to take crypto clients aboard probably because this sort of business has not been firmly established thus far.

Private banks, on the other hand, can contribute greatly to protecting your assets and expanding your business horizons. What advantages can a crypto company find when applying for private banking services? The main advantages include the following ones:

  • The opportunity to convert cryptocurrencies into fiat currencies. Some market agents will accept crypto for payments but the vast majority of them still prefer to be paid in euros, dollars, pounds, and so on.
  • The opportunity to make bank transfers. Your fellow crypto dealers may accept payment in a cryptocurrency but when you want to buy computer hardware, for example, you have to make a bank transfer in a fiat currency even if we are talking about a million-dollar transfer.
  • The opportunity to acquire an international pay card. Some Fintech companies do issue pay cards including cryptocurrency cards but in most cases, having a traditional plastic card is simply more convenient.
  • The opportunity to diversify your assets. As this is probably the most precious of all opportunities that private banking provides for, we are going to dwell on it a bit more.

Flexibility in cooperating with private banks

It goes without saying that your capital is perfectly secure if you use private banking services. Do they cost a lot? Well, private banking does come at a price but there is competition in this sector of economy similarly to all other sectors. In the epoch of the Internet, the competition is only growing and thus is making the prices more affordable.

Cryptocurrency miners and dealers are growing more interested in private banking services too as they are starting to appreciate the exciting opportunities that they can bring. 

With private banking, you can have access to the advantages that are unavailable with standard banks. One of these advantages is the possibility to talk to a highly professional bank officer – your personal banker also referred to as a ‘relationship manager’. You do not have to rely on the answers to your questions provided by the call center operator, a recent college graduate. Instead, you can pick up the phone and call your personal banker at any time of the day.

Banks appreciate wealthy clients. For this reason, your personal banker will want to reply your email messages in a fast and exhaustive manner. He or she will want to be highly flexible and efficient in catering to your financial needs, because if s/he does not, you will simply choose a different private bank!

It is true that commissions are higher in private banks than in standard ones. But the higher commissions that the bank charges allow the managers to dig deeper into various issues, to analyze a wider spectrum of opportunities. Faced with a difficult issue, the private banker will carefully study all possible solutions while the manager in a standard bank will simply say that solving this particular problem is impossible. High commissions pay back without doubt: wealthy people would not use private banking services otherwise.

There is one more form of private banking and this is external asset management. While a relationship manager works for a particular bank and needs to promote the bank’s interests, an external asset manager (EAM) is a freelancer working for no particular bank. Such a position makes him or her even more efficient in catering to the client’s needs.

External asset managers are normally former relationship managers who have worked for a bank or banks and who have learnt the ropes there. Their professional knowledge allows finding the best financial solutions. As a rule, an EAM will cooperate with a few banks at a time, and this lets him or her compare the solutions and the service conditions that each of the partner banks offer. And being able to compare several products means being in a position to choose the optimal one in each particular situation.

How much money do you need to obtain private banking services?

Private banks are often quite reserved about the minimum amounts of initial deposits that they require. They want to appear as elite financial institutions that service only super wealthy clients. The truth is, however, that some of them will accept only a few thousand dollars as the initial deposit on the condition that they see good perspectives in cooperating with the applicant client. Private banking is about an individual approach to every customer.

On the other hand, if you are a wealthy individual, you should not actually look for a bank that requires a small initial deposit. By putting little money into your account, you will be limiting your private banking opportunities severely. The larger you deposit is, the greater your perspectives are (up to a certain point, of course).

There is a group of entrepreneurs who can especially benefit from private banking services: these are the people who own only one type of assets such as cryptocurrency, real estate, or company ownership share. Private banks can help these owners do the following:

  • Diversify their assets, which will let them become less dependable on one asset type thus making their financial position more secure;
  • Use the existing wealth for generating new wealth;
  • Take loans against the assets that they keep with the private bank, which will allow financing various projects without investing/ freezing their own capital.

Can you take a loan on the pledge of a cryptocurrency deposit?

One of the most attractive products that private banks offer is secured loans. Instead of selling part of your coins or your company ownership share, you can take out a loan that will be secured by the assets that you keep with the bank. Because the loan is secured, the interest on it is going to be low.

We must admit, however, that cryptocurrencies are not among the most popular pledged items with the private banks. At the same time, there are a few banks that will accept Bitcoin or Ether and we know these banks. Cooperation between private banks and the crypto business is only starting but the perspectives look very promising.

If you have gold and/ or silver to deposit, the metals will make a perfect security against which you can easily take a loan. We have had clients who converted some of their Bitcoins into gold, took out loans, and continued making profits by investing the money into cryptocurrency operations.

In addition to that, private banks will gladly accept airplanes, vintage race cars, old wines, and luxury items as securities. Your opportunities to take out a secured loan from a private bank are extremely wide.

Investment project example

The economic crisis that the Covid-19 pandemic has brought about makes a larger number of wealthy individuals think about new ways of protecting their assets and what is much more important – their personal security. One of the most efficient methods of achieving this goal is acquiring citizenship of a foreign country.

There are more than a dozen countries in the world that offer their citizenship to foreign investors. That is to say, you can literally ‘purchase’ foreign citizenship. With the pandemic in the background, the countries that sell their citizenship to foreigners are trying not to lose too many new applicants for citizenship. They make some attractive offers to investors looking to acquire second citizenship.

For instance, Saint Lucia in the Caribbean offers an opportunity to invest into zero-interest Government bonds thus qualifying for citizenship of the country at a 50% discount. While normally the required investment amount is US$ 500,000, right now you can put only US$ 250,000 into the Government bonds and become a citizen of this beautiful country. After five to seven years, you can sell the bonds back while keeping the St Lucian passport.   

If you put your own money into the St Lucian citizenship-by-investment program, the sum indicated above will remain ‘frozen’ for a few years generating no profit for you whatsoever. Now, what can you do if you have a considerable deposit in a private bank (cryptocurrency, gold, or whatever)? You can borrow US$ 250,000 from the bank against the deposit. Obtaining the loan at 1% per year is easy with the current interest rates (some of them are actually negative these days).

If you do some simple math, you will see that purchasing citizenship of St Lucia will ultimately cost you US$ 12,500 plus the application processing fee and other state duties. Not much for a foreign citizenship, is it? Besides, your personal capital that you keep with the private bank that finances your purchase of foreign citizenship will remain at work and thus keep growing. This is certainly an opportunity not to be missed.

Private banking for families and dynasties

One more defining feature of private banking is that banks establish long-lasting relationships with their clients’ families. Many contemporary private bank customers have followed their parents and grandparents in obtaining the banking services.

If you become a client of a reputable private bank, your children and your grandchildren will find it much easier to obtain services from the same bank. Why? Because their father (grandfather) has a large deposit with the bank! Thus, your children will not have to make heavy initial deposits as they are the heirs to your fortune.

Professional support in obtaining private banking services

There are many private banks in Switzerland, Great Britain, the USA, and elsewhere. Each of them will offer its own range of banking services and each of them will have its own requirements to prospective clients.

There are also many external asset managers in the world: some of them private individuals and others legal entities. Different EAMs will have different areas of specializations: some of them will be professional investors in certain kinds of stocks, for example, while others are good at helping you minimize the taxes, and so on.

Obtaining private banking or external asset management services can potentially bring weighty benefits to a wealthy person. To apply for these services you need an eligible introducer such as Offshore Pro Group, for example.

We cooperate with a large number of private banks and we know many reliable EAMs that we will gladly introduce you to if you wish. We charge a fee for these services but we will do our best to find the solution tailored to your personal preferences and financial opportunities. We will help you find the private bank and/ or the EAM that will satisfy all your requirements, efficiently protect and grow your wealth, and let you feel secure. Please contact us by email, live chat, or a messenger and place a request for services with us. We will reply to your message ASAP.

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