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Opening Bank Account For A Web3 Company

Web3 companies are at a rapid growth stage, leveraging blockchain technology to create decentralized applications that promise to revolutionize various industries. However, one of the foundational steps is often mired in complexity: opening a bank account that can manage both – crypto and fiat currencies.



Why Web3 Companies Need Bank Accounts?


The primary hurdle for Web3 companies in accessing traditional banking services lies in the perceived risk associated with the cryptocurrency and blockchain industry. Regulatory concerns, the volatility of digital assets, and the innovative nature of Web3 business models can make banks hesitant to offer accounts to these companies. A traditional bank account remains crucial for day-to-day operations, from paying salaries to managing operational expenses.


Moreover, Web3 companies and applications often have fiat and crypto currencies interconnected in their operational models, therefore a need for a bank that can host and transact in both is arising. Luckily, there are digital banks that have focused on making this real and available to the industry. Now Web3 companies can have a dedicated fiat IBAN and a crypto wallet within the same banking platform. On top of that, on-ramp and off-ramp operations become easy and efficient when there are no cross-institution transactions and everything happens within the same eco-system of banking.



Selecting The Right Bank For Your Web3 Company


This paragraph starts with a primitive but crucial action - thorough research of banks that have appetite and willingness to work with Web3 companies. As mentioned before, there are now digital banks focusing on serving Web3 companies and tailoring the to their banking needs. If you would like to get an up to date list of digital banks that are efficient working with Web3 companies, fill out our contact form, and we will send it to you by email.


Generally we suggest to focus on institutions that have a history of serving tech or Web3 industries. Understanding their currency and payment capabilities is crucial as much as negotiating the right commercials. The more currencies and payment methods you will be able to get – the better. Secondly, make sure the bank can provide you with the API connectivity, as you might want to automate some of your banking and reconciliation processes once the company grows to a certain size.


Lastly, the jurisdiction of the bank is very important. For example, if your Web3 company is planning to do business globally, you might want to have bank accounts that are based in trustworthy locations and give confidence for new users or clients to send their money to. Such jurisdictions like EU, UK, Canada, US, Australia are good examples.


Prepare Your Company Documentation


Ensure all your company documentation is in order, including but not limited to:


- Company registration and incorporation documents

- Regulatory license (if applicable)

- Detailed business plan, including an overview of your Web3 project, revenue model, and compliance measures

- Identification documents for all company officers and major shareholders

-Proof of Address (business and key company representatives)

-Working website or marketing materials

-Audited financials (if it is not a startup)



Highlight Compliance And Risk Management


Banks will assess your risk profile, so it's crucial to demonstrate your commitment to compliance and risk management. Prepare to discuss:


- Your Anti-Money Laundering (AML) and Know Your Customer (KYC) processes

- How you manage and secure digital assets

-How you manage OTC transactions

- Any regulatory licenses you've obtained or applied for

- Partnerships with legal or compliance advisors

-Transaction monitoring system

-If applicable, demonstrate who are the investors in your project, that might add a layer of trust too



Be Transparent About Your Business Activities


Transparency is key to building trust with your banking partner. Be clear about:


- The nature of your Web3 project

- Your use of blockchain and cryptocurrencies

- How you generate revenue

- Your customer base





Opening a bank account for a Web3 company involves navigating a complex landscape fraught with regulatory scrutiny and risk aversion from traditional financial institutions. However, by carefully selecting the right bank, preparing comprehensive documentation, and demonstrating a strong commitment to compliance and risk management, Web3 entrepreneurs can overcome these hurdles.

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