How Coinme Transforms Banking Partners into Crypto Providers

Financial institutions face mounting pressure to offer cryptocurrency options as customer demand grows, particularly among younger demographics. Recent data shows 28% of investors aged 21-43 see greater growth potential in cryptocurrencies compared to just 4% of those over 44.

Most banks and money services businesses lack the technical expertise, regulatory knowledge, or risk appetite to build crypto solutions from scratch. This gap has created an opportunity for specialized infrastructure providers like Coinme to offer white-label solutions.

The MoneyGram Partnership

Seattle-based cryptocurrency exchange Coinme exemplifies this approach through its partnership with global money transfer company MoneyGram. This collaboration demonstrates how established financial firms can quickly enter the cryptocurrency market without building capabilities internally.

MoneyGram’s integration with Coinme began in 2021, enabling cash-to-crypto transactions at thousands of physical locations. By January 2022, MoneyGram deepened this relationship by acquiring a 4% ownership stake in Coinme.

Later in 2022, “MoneyGram selects Coinme to power its mobile-based crypto offering,” allowing MoneyGram to provide cryptocurrency services directly through its mobile app without developing blockchain expertise internally.

Modular Infrastructure

Coinme offers partners a modular “Crypto-as-a-Service” (CaaS) platform with three core components that can be adopted separately or together:

• Payment Processing – APIs for purchasing tokens with fiat currency
• Redemption Services – Systems for converting crypto back to cash
• Custody Solutions – Secure storage infrastructure for holding digital assets

“Because Coinme has these baskets of infrastructure, we’re able to allow the partner or the token project to really pick and choose the user experience that they want to provide,” explains CEO Neil Bergquist.

This flexibility allows partners to implement specific capabilities matching their business model. MoneyGram prioritized enabling their existing customer base to purchase cryptocurrency using established payment methods, while leveraging Coinme’s backend to handle blockchain transactions and custody.

Regulatory Advantage

Perhaps the most valuable aspect of Coinme’s offering involves regulatory compliance. The company holds proprietary money transmitter licenses, positioning partners to offer cryptocurrency services without navigating the complex regulatory landscape themselves.

Financial institutions remain cautious about entering the space after witnessing regulatory actions against crypto businesses. Bergquist notes that “when you deal with companies worth more than a billion dollars and already have a good thing going, they’re less likely to take a potentially unnecessary risk.”

By partnering with a licensed operator like Coinme, financial institutions reduce their regulatory exposure while still participating in the cryptocurrency market. This arrangement allows banks to satisfy customer demand without substantially increasing compliance costs or regulatory uncertainty.

Future Banking Integration

Banking partnerships represent a growing focus for Coinme, which has shifted from operating its own Bitcoin ATMs to enabling other companies’ financial infrastructure. Bergquist views this approach as creating an “interoperable system, like the internet” for financial services.

While many large institutions remain hesitant, awaiting clearer regulatory guidance, Coinme positions itself to capitalize on institutional interest when that clarity arrives. Recent developments like Bitcoin ETF approvals signal progress toward mainstream financial acceptance.

These partnerships offer banks a way to retain younger customers who might otherwise use specialized crypto platforms. They also prepare institutions for a future where “people who maybe don’t care about crypto will be using crypto and blockchain technology, and it might not be terribly obvious.”