New York-based Quontic Bank has become the first FDIC-insured financial institution to launch a bitcoin rewards checking program.

Announced Tuesday, the program includes a bitcoin rewards debit card (1.5% back), mobile app, access to ATMs, and mobile payments options like Google Pay and Apple Pay. 

The bank had to receive approval from the U.S. Office of the Comptroller of the Currency (OCC). In July, the OCC issued a letter enabling nationally chartered banks in the U.S. to provide custody services for cryptocurrencies. Acting Comptroller Brian Brooks has hinted at more “good” actions on crypto by the end of Trump’s term. 

At Quontic, customers’ bitcoin will be custodied by crypto asset manager NYDIG, which just scooped Quontic’s former chief innovation officer to serve as its head of bank solutions. Major banking software and payments technology provider FIS will build a mobile app with Quontic to track bitcoin rewards in the second quarter of 2021. 

“This is the first time any bank or any core [banking system] has done anything with bitcoin that is consumer facing,” Quontic CEO Steve Schnall said in an interview.

Customers will be able to hold their bitcoin with NYDIG or redeem it in cash, Schnall said. At the moment, customers are not permitted to transfer the bitcoin to another wallet address. 

Quontic is a tiny bank with only $1.4 billion in assets, about 0.044% the size of JPMorgan. In 2019, it banked a couple crypto firms. Since then, the bank has pivoted from offering bank accounts to crypto firms to trying to bring bitcoin to the masses. 

“Right now we’re not banking crypto companies,” Schnall said. “For the foreseeable future, we’re just going to focus on the consumer.” 

The bitcoin rewards program is initially available to residents of Alabama, Arkansas, California, Maryland, Massachusetts, Missouri, Montana, New York, Pennsylvania, Utah, Wisconsin and Wyoming. Quontic does business in all 50 states, but these are the states that NYDIG currently operates in.

Update (Dec. 15, 17:18 UTC): Adds comments from Quontic CEO Steve Schnall.

Correction (Dec. 15, 17:30 UTC): Quontic is headquartered in Manhattan, not Queens. The bank moved across the East River in July 2019.


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