coindesk.com
Plaid, an open-banking system that aggregates users’ financial information, said it’s extending its reach to include accounts on cryptocurrency exchanges, starting with Binance.US, Kraken and Gemini.
The platform is now able to show information such as balances, transactions and the type of crypto assets held from the three exchanges, the San Francisco-based firm said Thursday.
Plaid already offers crypto holdings information for apps like Robinhood and SoFi, and the plan is to connect to a universe of crypto account providers, with Blockchain.com and BitGo being integrated later this year.
“Up until now, a lot of people have had separate crypto and traditional finance lives,” Plaid’s head of identity Alain Meier said in an interview. “We want to help consumers create a holistic view of their finances, so this move is especially important given that something like 60% of millennials now own crypto.”
This holistic view is useful for financial planning, tax assessment and net worth calculations, Meier said, with connectivity into other investment accounts, from brokerage and retirement accounts, to 529s (a type of tax-advantaged saving plan for college fees) and U.S. health savings accounts (HSAs).
Firms like Plaid have been part of an explosion in fintech apps as banks gradually opened up to a groundswell of digital innovation. Cryptocurrency exchanges, like banks, are understandably nervous about what happens to their customer information, given the continual threat of sophisticated hack attacks.
“This is a read-only feed of transactions to be included in things like wealth-management apps or transfer apps,” Meier said. “There’s no potential access for these apps to then go ahead and steal your crypto or anything. We also have robust due diligence and risk management policies for all of the customers who we bring onto the Plaid network.”
Plaid already works with a number of exchanges, including Coinbase, through its identity verification and bank-linked account funding services. The API fintech has also shown a keen interest in decentralized finance (DeFi), back in 2020’s “DeFi summer.” An API, or application programming interface, is a way for two programs to interact and share data.
“Plaid is composed of a lot of people who are just nuts about crypto,” Meier said. “Over time, we want to help bridge that gap between Web2 and Web3 and build developer-first tooling products that can do that.”