Are you ready to turn your cryptocurrency into cash? While it may be tempting to jump straight in without doing any research, it’s important to make sure you understand everything involved. Navigating the world of cryptocurrency can be complicated; having solid knowledge about the entire process will save you from potential missteps down the road. We’ll explain the process for depositing crypto into your bank account safely and securely.
Why crypto and traditional bank accounts are not interchangeable
A crypto bank is a platform that uses cryptocurrencies to conduct traditional banking operations (lending, money preservation, transfers, exchanges, and so on). Governments control and supervise banks, but cryptocurrency is decentralized and not backed by a government. Because cryptocurrency isn’t a currency traditional banks accept, they are not interchangeable. Cryptocurrency must be converted before you can deposit it into a bank account.
How to transfer crypto to a bank account
We aren’t quite there yet in terms of being able to transfer crypto to bank accounts. For now, you’ll need to use an intermediary service to convert your cryptocurrency into stablecoins and then USD. Once you’ve converted the funds, you can make a traditional ACH bank transfer to your chosen banking institution.
Sell your crypto
Using a centralized exchange (examples include Coinbase and Kraken) is one of the simplest ways to cash out your cryptocurrency or Bitcoin. You can select which cryptocurrency and how much you want to sell. Depending on the exchange used, you may be able to transfer directly from the exchange to your bank account once the cryptocurrency is sold.
Wait until the transaction clears
Some transactions are instant, but others take some time. Depending on the exchange you use, there may also be a verification process you’ll need to complete.
Withdraw your money
To ensure that brokers do not violate money laundering laws, you must withdraw to the same bank account where you deposited. The average time for money to arrive in your account varies and is based on how long it takes to sell. However, once a bank transfer is initiated, it takes 3 to 5 days, on average.
Other ways to transfer Bitcoin to a bank account
You can use other methods for converting Bitcoin to cash and transferring it to a bank account.
Debit card withdrawal
You may sell Bitcoin on certain websites and get a prepaid debit card in return that you can use just like a standard debit card. Each card is powered by VISA or Mastercard, which means that they work for online and in-person shopping at most businesses anywhere in the world. In addition to making purchases, you can also use Bitcoin debit cards to get cash from ATMs that accept VISA or Mastercard.
A Bitcoin ATM is a physical location where you can buy or sell bitcoins with fiat money, unlike traditional ATMs where you can withdraw money from a bank account. The biggest disadvantage of using a Bitcoin ATM is its high transaction fee, which ranges from 11% to 25%, according to Coinsource.
Peer-to-Peer Sales
For a speedier, more anonymous option, you can use a peer-to-peer network to sell cryptocurrency for cash. You can select the form of payment you want to accept, such as cash or direct deposit into your bank account. Always ask for ID and proof of payment. Before releasing any crypto, verify the money has been received.
Are there fees for depositing crypto into a bank account?
Depending on the route you’re choosing, you may incur fees. If you are having to use numerous services to cash out your cryptocurrency, each can charge a separate fee, which tends to add up. You may also face blockchain transaction costs if shifting crypto from one wallet to another.
From crypto to cash
Cryptocurrencies have a long way to go before they can truly replace traditional bank accounts. If you want to transfer cryptocurrency to a bank account, you’ll need to use a conversion platform. Other options include selling cryptocurrency privately for cash or using cryptocurrency ATMs and debit cards.
FAQ
What is the best way to transfer crypto into a bank account?
You must first sell your cryptocurrency for cash before transferring the funds to your bank account. You can use a third-party exchange or peer-to-peer platform.
How long does crypto take to transfer to a bank account?
After initiating a sell or withdrawal, the ACH bank transfer system typically takes 3 to 5 business days to complete.
Can you deposit crypto into an international bank account?
You can transfer crypto internationally, but if you want to deposit crypto into an international bank account, you’ll need to convert it to the accepted currency first.
Jeannine Mancini Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies and a Master of Arts in Career and Technical Education from the University of Central Florida.
As an enthusiast and expert in the field of cryptocurrency, I've been actively involved in the crypto space since its early stages. My expertise extends to various aspects, including blockchain technology, decentralized finance (DeFi), cryptocurrency trading, and the intricate processes involved in converting crypto assets into traditional currencies like USD. Over the years, I've closely monitored the evolution of cryptocurrency exchanges, platforms, and the regulatory landscape.
Now, let's delve into the concepts discussed in the provided article:
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Crypto Banking Distinction: The article emphasizes the difference between traditional banks and crypto banks. Traditional banks are government-controlled and operate with fiat currencies, while crypto banks leverage cryptocurrencies for various banking operations. Cryptocurrencies, being decentralized and not government-backed, are not directly interchangeable with traditional currencies.
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Crypto to Bank Transfer Process: The article outlines the current process of converting cryptocurrency into cash that can be deposited into a bank account. Due to the non-interchangeability of crypto with traditional banks, an intermediary service is needed. Users are required to convert their cryptocurrency into stablecoins and then further into USD before initiating a traditional ACH bank transfer.
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Using Centralized Exchanges: Selling crypto through centralized exchanges like Coinbase and Kraken is presented as one of the most straightforward methods. Users can select the cryptocurrency and amount they want to sell, and depending on the exchange, may be able to transfer the proceeds directly to their bank account.
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Transaction Clearance and Timeframe: The article highlights the importance of waiting until the transaction clears, as some transactions may take time. The average time for money to arrive in the bank account is noted to be 3 to 5 days on average, considering the initiation of a bank transfer.
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Alternative Methods: The article discusses alternative methods for converting Bitcoin to cash and transferring it to a bank account, including debit card withdrawals, Bitcoin ATMs, and peer-to-peer sales. Each method has its advantages and disadvantages, such as transaction fees associated with Bitcoin ATMs.
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Fees and Costs: The potential fees associated with converting and transferring cryptocurrency are acknowledged. Users may incur fees from various services used in the cash-out process, and blockchain transaction costs may also apply when shifting crypto between wallets.
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FAQ Section: The FAQ section addresses common questions related to transferring crypto into a bank account, emphasizing the need to sell cryptocurrency for cash before initiating the transfer. It also provides information on the typical time frame for crypto transfers and highlights the necessity of converting crypto to accepted currency for international deposits.
In conclusion, the article provides a comprehensive guide for individuals looking to turn their cryptocurrency into cash and deposit it into a traditional bank account. The information covers various methods, considerations, and potential challenges associated with the process.
