Topic: Big decision by the OCC - Banks can now hodl Bitcoins. (Read 390 times)

Bitcoin was created to eliminate the third party but many of us are claiming that it will help the bitcoin to get main stream.Why people need to use banks to hold bitcoin its became burder to keep it on their own?

Own bitcoins and entrust their storage to banks? I do not get the point of it. The main attraction of cryptocurrency is precisely to get out of the financial control of banks and governments in general. I definitely will not use such services.
Besides, I have a poor understanding of the mechanism of this service. In order to be responsible for storing cryptocurrency, the bank must transfer it to its cryptocurrency wallets and we, it turns out, will not know their private keys? Are we going to instruct banks to conduct a specific transaction? I personally don't like it.

This move can help Bitcoin increase its credibility and increase its usage much more than before. On the other hand, Bitcoin is decentralized like any other cryptocurrencies. By doing this, banks will gain control and they will be able to monitor transactions of their customers. This is opposite to the nature of cryptos. 

While this may have good impact for mass adoption of Bitcoin, I am also after the privacy and still having full control with your decentralized assets if these were to be kept in the bank. Nevertheless this has been a good news, maybe a more concrete and specific concept should be mapped out, out of this complex situation.

A decentralized asset is managed by a centralized body, a bank. Interestingly enough, Switzerland has stored cryptocurrencies for its customers and now to banks across the US.
Who will give my assets to the holding banks? Perhaps the rich people or corporations are putting bitcoins in their reserves.
I wish they would accept bitcoin as a means of payment between banks and a means of paying people's debts more.

So i had a question here couldn't you as a crypto currency holder make a multi signature wallet which could then be linked to your bank account instead of just giving them them full custodianship of your Bitcoins. Shouldn't this theoretically allow you to still maintain control over your funds since the bank would be unable to move your money without your permission, while at the same time it could help dealing with issues related to crypto inheritance.

banks shouldtake startegic positions in the blockchain space so as to remain effective in the financial world. If the world goes digital and complete alternative to banks are presented by innovators then it poses a threat to the traditional banking and can entirely eliminate her.

This can be viewed from different perspectives. One is from within the community of crypto users. Here there's this famous 'not your keys, not your coins' kind of thing that does not endorse banks holding cryptos on behalf of their clients. Another is the perspective of higher adoption. So we're talking about people who are not crypto users yet and are generally comfortable with banks. But they might be curious about Bitcoin and consider it a good idea to have some just in case. For these people, it would be great news that it's possible to put Bitcoin into their bank similar to how people put gold in a bank safe. So all in all, I think it's good news that there'll be more options for people and for banks who want to deal with cryptos.

I was disagreeing with you one different thing, the raid on those accounts, I don't think that those bitcoins accounts will be even 0.001% safe than a normal fiat account in case the government wants a Cyprus style shave over a certain limit.

As for the choice they make, yeah, people are free to choose what they want, although I am not going to recommend anybody to store their coins like that unless I know he is completely incapable of storing by himself safely, you've got to respect that it's their money, they can do whatever they want, store it in a bank or blow them on hookers, forcing them to do otherwise would make us look  just as bad  
Oh, and I'm certain that if banks start offering this service with normal maintenance fees, not outrageous stuff like 2-5% or 100+$ per year we will soon have way more bitcoins store in banks than in web wallets which will also clearly outrank private wallets. I' will certainly not be happy with this outcome but I will have to live with it.


Oh yeah, they will not do that, how could they do it.../s
Just wait for it, I'm pretty sure they will come with something like white-labeled addresses where you can send your coins and a lot more blacklisted.
Coinbase did it in the twitter hack, you think banks won't do it also?

And it's going to be pretty interesting to try to explain the bank why the coins with which you purchased something over the net ended up in a casino's address in the next tx.

This brings us closer to mainstream adoption, but no thank you, I can handle my coins on my own. Basically, people who would avail of such a service give up their privacy and their private keys to a third-party entity that could lose these things in a hack. Add to the fact that this might even get your crypto holding details to the authorities to check on you every now and then, which is kinda annoying since they can literally pin you down on anything they want to just because you have something on your crypto pockets.

This defeats the purpose of 'being your own bank' presented by crypto. For legal purposes, this would work, but for personal reasons /use cases, better to have the coins on you than to entrust it to someone else.

The good news, it means that their country really support the existence of BTC and also other cryptocurrencies. this can be a leading ways so far moreover the USA is a big country with high power to influence the other countries around the world.
I think they will. They know how precious Bitcoin is, although they also know that BTC is volatile, they may charge the high fees because of this value and precise. however, they must have certain indicators of the fees that will be also announced to the citizen in the country. So, there will be not kind of one-side solution. Additionally, if it is legalized and available on banks, will it also charge the taxes? I'm curious also about it.

Those people that skeptical about bitcoin will somehow realize the crypto is not that bad as they think. Because of this news, I'm expecting a newcomers that will consider the use of bitcoin whether for business or investment purposes.

I also don't believe that banks will ask for whole documentation anytime they will receive deposits of bitcoin or a client that will move their bitcoin to their account. Just like how fiat was moved or deposit to the bank, I think it will just be requested to customer once they detect a whole bunch of bitcoins sent in the account at once as it will trigger the alarm under the money laundering law.

yikes  . i thought this was a good news not until i read that they charged a fee  . we know that banks dont charge a small fee when we use thier service like when you withdraw on an atm and others   .

the only pro is that this introduce crypto to non crypto users  because almost 90 percent of bank users dont have any idea or not involved on the crypto , thats why they only trust banks  .  this concept is a plus point to the banks and they will look like a good guy here

Yes, the first thing that comes in mind is the data gathering. Almost every bank operating around the globe has got the entire details of its customers. This means the financial data is recorded, now through the banks holding bitcoin services more people opt for it as it gives more trust than exchanges. But, as in the above quote, it is pure surveillance over the individual wealth.

Related to the big decision from the OCC is positive news should be, because the government has begun to open with Bitcoin.
And this can be a trigger for mass adoption, because ordinary people don't consider Bitcoin illegal anymore. But it certainly has
positive and negative effects, we must be able to behave wisely.

It’s not a must that you’re going to use banks to hold your bitcoin, it’s all about your choice, so don’t complain about the fees yet when you have no idea of what it’s going to be. When it’s time and banks are ready to start offering that service, they will make proper announcement to the public and their customers, and if your bank is offering the service you will get to know what the fees are and decide for yourself whether to let the bank hold cryptocurrency for you.

If the fees are too much for you, you can continue making use of the method you’re using now to store. Banks are going to charge fees for sure, they are not going to be offering this kind of service or free, they are taking risk holding it for you and there will be more better features added.

good for adoption. they are turning to Coinbase and BitGo.


they wanna make it appear to the public that is hard to keep digital currency for yourself and that it need to be in their custody?  nice plan there.

but what's stopping people from withdrawing their money from banks and buy BTC on LBC and other services that exclude banks. one has to really learn it from the guys who wil advice them to keep the private key to themselves and have the custody as well.

I think banks bearing the losses of hacks will be bad for us in the long run. Top banks are classified as "too big to fail" companies which means if they ever get insolvent the government injects a lot of cash in them which is bad for the whole economy because this inflates the dollar. Given that hacks stealing tens or hundreds of millions worth of BTC are common this will inject money in them faster.

Wonder what's the real motive behind this. To increase their surveillance over individual wealth? Hmm. I won't use this nor support people to do this, you could hold bitcoin on your own wallet and cash out without giving stuff like KYC. Why do I feel that banks are gonna compete with exchanges now.

While this is neither good nor bad news to me personally, many people might actually welcome this development. After all, we are all aware that not everyone getting into Bitcoin is doing so for the sake of the philosophy it espouses.

Many of us here may think this is somehow funny or very ironic but then a lot of people are admittedly a failure in keeping valuables. And that might include a significant Bitcoin holding.

A lot are hodling Bitcoin for the sake of investment or for storing value. Most of these people probably don't mind divulging certain personal information or if the banks or the government is able to know their worth.

This is especially for all those who cannot function as individual banks.

Of course I don't want it either, hence I hold my coins in self-custody. But then again, there are A LOT of other people out there outside our tech-savvy cryptocurrency bubble group that might want to take advantage of bitcoin's market characteristics(not necessarily the privacy and sovereignty characteristics).

The point here is freedom of choice. If they want to go let the banks hold their bitcoin knowing the risks, then let them. Doesn't mean that we also should follow suit.

Nope, because the thief is stealing only your device, the government comes and seizes everything!
And I would really want to see the banks not handling all the information to the government if they did decide to do that, do you? Or do you think the bank CEO has the encryption phrase in his pocket and he will swallow it once the feds storm the building?   Besides, it will fall into asset forfeiture, and not disclosing or trying to prevent the authorities from touching it will end in a criminal charge.


What volatility? You store 1 BTC you have one BTC!
Just like you store a golden ring, it doesn't matter what the gold price is.

Wait a second what exactly do you mean by this? Do you mean that i can write my private key on a piece of paper and keep it in the safe box of a bank because that was pretty much legal always. Or do you mean that bank will control my bitcoin and I have to give them the private key or transfer them possession. Because the later seems pretty scary to me. What is the point of having a bitcoin when you are going to safeguard it by a bank. Lol isn't the ironical? Or is it only me who found some irony in this?

Because having access to the device doesn't automatically mean that the thief would also have access to the device's contents; just as if someone stole my encrypted Linux device, the thief wouldn't have access to my files unless the thief has a device powerful enough to crack the encryption.

But then again, this is assuming that the banks would do at the very least a decent job with their opsec.

Also, I don't think comparing a customer's storage box to a bank's servers is a fair comparison either. Of course the bank's infrastructure would be vastly more secure, simply because they are far far more incentivized in keeping it secure.


Finally somebody gets it. Let's not forget that there are technologically-illiterate people out there too.

Let me just clarify one thing here, the banks are allowing their clients to hold some BTC on their accounts with the bank? Well, this is not usually as we know banks are not crypto-friendly but what is exactly going on here man? I don't know if it is good or not cause this not what I am expecting for the banks. guess things has changed now and they will have some planned with cryptocurrencies. The only problem here is how they will handle the volatility of the price do they have some plans on the unknown movement of the price in the crypto market?

As you say, the banks will charge high fees for their members with a large amount of bitcoin. Besides that, I think the bank will need the members to fills another document, just in case if the member is not related to money laundering. However, I prefer to hold my bitcoin on my own wallet because I don't want to see the other party services manage my bitcoin. They will become suspicious of me, and I think they will investigate me to know more about how I can make more bitcoin.

From many investor’s perspective, it does make sense. From most forum member’s perspective, it doesn’t. People here on the Forum are used to "being their own bank" to a certain degree, and more or less understand what it entails in terms of wallets, security and ownership.

Nevertheless, there are many investors out there that would probably ponder investing some amount in Bitcoin, without having to go on to understanding a bunch of technicalities that are behind being their own bank, and beyond their comprehension. They are used to having the bank being their custodial, and would accept a similar solution to their Bitcoin custody. The fineprint here would be paramount to read and understand, in order to get to know the bank’s degree of liable responsibility and guarantees.

It’s not my piece of cake, but I get why it can be that of others with different backgrounds and investment habits.

Yeah,storing Bitcoins in a bank,instead in your own BTC wallet,doesn't make any sense.You will pay additional fees and get the same level of security,maybe even lower.
This decision acknowledges Bitcoin as a valuable asset/possession,but nothing more.It won't help boosting the adoption of Bitcoin,by making buying and storing Bitcoin cheaper and more convenient.
It will only create another income stream for the banks(if there are people,who are ignorant enough to give their Bitcoins to a bank).

I am wondering, why should I store my bitcoin to the banks? Am I not my own bank? Just assume it would keep role bitcoin adoption, but besides that, it would freeze your bitcoin as well. And obviously, the most disadvantage is you are exposing yourself as a bitcoin user. Perhaps buy-sell via bank is something positive in my opinion. But storing my bitcoin there isn't a wise decision. Even I am not encouraged to get loans or staking my bitcoin with the bank. Maintenance fees would be high as well. I am pretty sure any big holders will not store their bitcoin into the bank. But overall it's a positive move for bitcoin adoption.

So reading through, the first steps that banks might take will be

- offering custodial services
- staking..lol
- crypto lending

Well, of all they could do with cryptos those are the ones I'm not really keen on it.
Not going to store my coins in a bank for sure and crypto lending is again not the thing I would choose to get involved in right now.

But, it's a step forward, I would really love to see them offering bank account in BTC, so companies could start offering BTC payments directly with their bank and not going through all the trouble of having a third payment processor on top of their bank account. I doubt that would come too soon but who knows, stranger things have happened 


What would be the difference between seizing a box and a server or a laptop? The keys might be digital but that information containing them is stored on something physical.

Though I'm definitely not advocating for this and I'm definitely not saying that we should trust the banks to hold our keys, not sure why you would compare something they're storing physically, to something digital though. Unless they're going to store the coins through physical paper wallets LOL.

This is great because it will help bitcoin adoption, most people are novice and know nothing about bitcoin but to only hodl, this will be an advantage to governmental bitcoin control. But, bitcoin is decentralized, we can hodl our bitcoin ourselves which makes us to have full control of our bitcoin on blockchain rather than banks doing such for us. But I know many people will prefer banks to do that for them because they know nothing about bitcoin, this will truly help bitcoin adoption but could be the dawning of bitcoin taxation policies and bitcoin indirectly becoming centralized.

This is not a good decision for customers, if they want to go that route..

Banks have show in the past that not even your safe deposit boxes are safe and untouchable (Example : https://www.qwealthreport.com/safe-deposit-raids-governments-out-of-control/

Did you know this? ---> https://pivotalperformanceprocesses.com/government-raided-safe-deposit-boxes-1930-gold-confiscation/ and I quote, "The Government Raided Safe-Deposit Boxes to Confiscate Gold During the 1930s."

So what do you think will happen to bitcoins that are stored at centralized Banks, if a corrupt government wants to seize it? The Gold seized was in the US, not some 3rd world country.  

Since the beginning of this year, such a law has allowed some German banks to get involved in the crypto business. It seems that such business practices will become common in all countries where banks will be able to fight for such laws, because it is in their interest to make a profit, and obviously they see the potential for their earnings in crypto.

As pointed out in previous posts, this has its pros and cons - because surely more people will be interested in investing in Bitcoin if they are allowed to do so through banks - but on the other hand it is not right for banks to control something that should be decentralized. However, I believe that many are mostly focused only on the price, and that they are not very interested in other aspects - time will tell whether banks will become serious players and whether they will take part of the cake from the crypto exchanges.

There are two parts of the story. One is good and another one is bad. Let me explain in details,

The good part:
1. Crypto will become mainstream with banks offering crypto services.
2. Stores and merchants will be interested in accepting cryptos as a medium of exchange
3. Increase in credibility of cryptos
4. Chance of indemnity in case of a hack

The bad part:
1. The banks will have information about your crypto holding and your KYC data
2. Your crypto holdings will be reported to IRS periodically
3. Banks will control your crypto holding so you will essentially loose the control over your own money that you used to enjoy earlier with your own private key
4. Nothing you can hide from the government if you opt for crypto banking service.

So choose wisely before you cheer about it!

From what I can see from this, this will surely help with the adoption and should be able to help in reaching to other investors for Bitcoin but the downside is that there will be no privacy as for sure the bank will try to ask for identifications and documents. Also, people will not own that Bitcoin as of course the bank will have the private key to it. Maybe the bank will give the key to the user when we ask? I don't know.

The Office of the Comptroller of the Currency (USA) has allowed banks to hodl bitcoins on behalf of their clients, and this is a big news because banks will now be able to offer crypto related service’s for their clients. However I’m skeptical of this news too because banks may charge higher fees, and try and profit from each and every transaction their clients make. Lastly what do you’ll think of this move, will it actually help bitcoins in the long run or not?.


Source:

https://fortune.com/2020/07/22/bitcoin-big-banks-can-hold-occ-letter/