Cryptocurrency exchange Bitstamp has partnered with a Swiss bank to allow the bank’s customers to fund their dollar-denominated accounts with BTC as well as withdraw funds in the cryptocurrency. Deposited coins are converted to USD. Withdrawals are converted to BTC and transferred to the crypto wallets linked to client accounts.
Bitstamp announced on Friday that it has “partnered with Dukascopy Bank, one of the leading Swiss online banks, to enable crypto funding on their platform.” The exchange elaborated:
Dukascopy’s clients can now send bitcoins to their accounts and the crypto will be converted to US dollars, which they can use to trade on the Swiss FX Marketplace. Clients can also withdraw funds back to their cryptocurrency wallets in the form of bitcoins.
Geneva-based Dukascopy Bank offers currency and precious metal (forex) trading to retail and institutional clients. Its website explains that the funding and withdrawals of BTC are offered through “crypto-fundable trading accounts,” adding that BTC is currently the only cryptocurrency supported.
The bank explained that any BTC sent by clients to it will always be converted to USD. Bitstamp is responsible for exchanging fiat funds to BTC and back for the bank. “The proceeds of the BTC/USD conversion are credited in USD to the crypto-fundable client account,” the bank described, adding:
In case of withdrawal, the bank debits an amount of USD from the crypto-fundable client account, converts such amount into BTC at a current rate and transfers the bitcoins to the client wallet linked to his account.
“This partnership represents another step towards our goal of bridging the gap between crypto and traditional finance,” Bitstamp wrote. “It is further proof that our efforts in compliance and regulation continue to deliver results at a time of rapid maturation for the cryptocurrency industry.”
Dukascopy Bank’s Crypto CFD Offerings
This is not Dukascopy Bank’s first foray into the crypto space. It already provides contract for difference (CFD) “trading on price movements of cryptocurrencies, its derivatives or value estimations,” according to its website. Currently, only CFDs on BTC and ETH are available, both with a 33 percent margin requirement and a leverage ratio of 1:3.
Dukascopy Bank’s website further details that customers with opened CFD positions do not own the underlying assets and the “price of cryptocurrency CFD varies significantly across different cryptocurrency exchanges.” The bank also noted that its CFD “prices on cryptocurrencies are unique and based on its ability to hedge Dukascopy positions with external counterparties.”