Topic: Can We Expect A Legally Compliant Bitcoin Bank Soon? (Read 917 times)

Loans and crypto still work very well all the time, at least in this forum if someone can't pay his loan, then the collateral is taken or negative trust, the same thing will be applied if there is a bitcoin bank, yeah collateral works., finally the debt must be paid.
Since the bank serves for fiat currency and bitcoin in another path, so we just have crypto exchanges offers to buy and sell cryptocurrencies that cooperate with the bank.
don't know if there is someone or a community tried to create one, hmmmm but it will still be linked to the conventional bank for fiat currency, right?

I think it won't be fun if there is a Bitcoin bank, where access to bitcoin is monitored and taxed, I prefer in my wallet where I have full control over the bitcoin that I have, maybe when at the bank you expect interest and security guarantees from the government.

Thats what he precisely mean about "insurance" matters but the question is,is there someone would able to do so? Bitcoin Bank is total BS.
We dont need them and we dont need one because this is why Crypto exist which means we do have the full control of our finances without any 3rd party involvement.
Using up banks for storage? then how you would consider on all crypto wallets and storages atm?

By "insurance" do you mean something like FDIC where your bank deposit is protected even if the bank fails?

Most likely they are into the interest and insurance in which current banks offered to their depositors but you have a point about the disadvantage in which Banks are all trully goverment compliant in which they could trully monitor our assest movement from decentralization to centralization therefore i preffered to keep it to my crypto wallet too.

The biggest question is why do we need one, when you can do it all by yourself with your own wallets, it's like you want to be under regulation and you want banks and government monitor and tax you on all your holdings I don't think it will be profitable for a bank to set up one because of the volatility of the market.

The question about the demand is, however, a very good one. Banks usually operate with high fees. So although more convenient, buying/selling Bitcoin though a bank will be more expensive (in the same way converting EUR/USD/local currency is much cheaper at an exchange office than at the bank).

This is possible in the future if Bitcoin will continue to dominate and be legally accepted in the whole world. The same banking system and insurance just different currency so if all establishments will accept Bitcoin transactions then we will need someone to secure our Bitcoin assets in which only the Banks can guarantee it because they are the expert on this particular field.

It only defeats the purpose of Bitcoin if that's something you value but go against it anyway by using such a service. If you're here for the profits alone as trader, then it shouldn't be something to worry about for you.

It's important to understand that we have a choice to either use or not use these services, and as long as that is the case, I don't see it being a problem.... some services do add a lot of utility when it comes to trading and lending.

At the end of the day, it's nearly impossible to not deal with a centralized party.... you're either buying or selling on an exchange, day trading, lending, etc. As long as you don't keep your coins on an exchange when you're done it's fine.

This isn't happening in any time near future. Banking and bitcoin are two stringent enemies to each other. Best banks would do is tie up with cryptos like XRP which would be done to merely increase the swiftness of the transactions over the globe. Also inter banks transactions could happen using the blockchain. Moreover another thing how banks could tie up with crypto is that banks could use their idle funds and invest them in cryptocurrencies. Don't imagine anything like depositing and withdrawing cryptocurrencies or bitcoin directly into a bank or something like a bitcoin ATM from a bank because there are never going to happen on a great scale.

It actually defeats itself if a cryptobank were to be implemented. The reason for the creation of the blockchain was to prevent any third party from handling our transactions and to make everything accessible in a public ledger, which is open to everybody.

If a cryptobank were to be created, someone has to regulate, control, and manage the bank (which we all know is purely driven for profit). Someone is still handling our transactions. Not to mention, the fees behind every transaction are subjected.

Initially, I had maintained that there is no way we would have a crypto bank because the initial position of bitcoin and crypto is to ensure everyone is his own bank and there is no authorized body to be the deciding what the funds is being used for. However, with the way things are going, there is no way we wont get to that point because as development continues to happen, there would be need to be a fusion between crypto and fiat and that would be pushed forward by the entrepreneurs which might lead to a crypto bank.

Another point worthy of note is that for an industry to develop there is need to be a coffers where the people who needs funds can approach to raise money for their project for interest while those who with excess funds can get returns on the money. With that, there would be expansion in businesses and real projects being carried out with funds generated from crypto.

No one would really force you but for those people who are fully aware on the primary reason on why crypto is being created will definitely not used
up these kind of services. What for? when it comes to security,yourself storing common sense will be enough and in terms or capital gains or interest you can do it on your own.
This is why we wont able to see these bitcoin banks.


You got a point though which is actually the fact on most cases.People nowadays doesn't even know on why crypto is being created on the first place yet the main priority into their minds is on how to make money.The worst? complying KYC just to get some pennies.

Bitcoin can never turned out to be in physical form,but already lot of bitcoin ATM at the moment so you can convert your fiat and get bitcoins to your wallet.

The current bitcoin loans are from the individual users so they are collecting huge interest to assist the risk on it but no regulated system yet to avail bitcoin loan.

Will need to work with companies to help with AML compliance like Ciphertrace

One of the purposes of which digital coin is in existence is to relief bank and bank users of irrelevant stress with the technological upgrade.the bank is structured to be digital either. But I also think if there are few financial organization that can help with the management of Crypto Cash Dispenser it will be fine,or will all buy and selling of goods be online?? Maybe there should be some  bitcoin in fiat form that can be withdrawable from the dispenser. As regards the loan, I noted that the loan is possible and is already existing.

I don't think it's impossible if in the future something like this will come true. But I am sure that in the near future expectations about a cryptocurrency bank will soon be realized. Some time ago I read an article about something similar like this. Visit this link https://cointelegraph.com/news/swiss-crypto-banks-receive-licenses-from-financial-regulator

I'm not sure if this is something what you are looking for, but a german bank is working on bulding a bitcoin bank. just check bitwala -> https://www.bitwala.com/

i hope it helps

This is an important bit of information. People here seem to dislike the idea of centralized services, but the thing is that people can decide for themselves to use them or not. Not one of the services we have in crypto forces you to use them, yet people keep trashing their business models because it's against what crypto stands for.

Not everyone here has figured out that most people don't really care about being their own bank. They are here either to speculate or earn money and use an exchange to cash out.

In order to have newbies appreciate what Bitcoin stands for, we need another Cyprus type of crisis where everyone with a bank account in a specific country is subjected to a haircut. We haven't seen any of this happen since 2013.

Actually that idea is like making an exchange site or online wallet into physical form by adding some facilities like banks have. and your thoughts are like becoming your own bank will still exist even though bitcoin bank in the future is present, the bank won't force you to join, right? I think to implement this idea, then regulations for bitcoin must be made first.

I envisage that time too. Maybe not from 10 years from now but starting from 20 years from now, then I will agree. So, there is a possibility for that, your question is not asked in vacuum therefore.

Why not 10 years from now  The laws. It has to have some legal understanding that will not only bring more of adoption and usage but that will give rights to parties ; the banks, customers and government. This will give a backing to some remedies if there is defaulting parties.

Such laws will also stipulates the relationship between fiat issuing and bitcoin/crypto transactions too.

Indeed!

With Bitcoin we are own banks where we can held up our assets without any need of third parties or services.This is what makes Bitcoin itself becomes popular and
an exceptional innovation.We don't need banks yet we are already get tired of it since in the beginning.

I doubt with it, because bitcoin was designed as a bank for their user. Every user can do these things easily without an organization or a party to manage it.

As done by this forum, some user can make a loan to other people and they will pay within the allotted time with consequences when someone who borrows late to pays then their account will have a negative trust.

It's different and there are no correlation or comparison with BTC ATM's and bank. I will assumed that BTC ATM are not even sponsored by any banks.

So I don't think that we can have a legally compliant Bitcoin Bank simply because those two is not a perfect combination. Crypto is supposedly a decentralised system with no central authority so how can a definition of a bank fit it? So it won't happened not even in the next 10 years. So it's either you go with the traditional banking system or style with crypto and hold your coins and your private keys and have full control of it.

More countries will allow blockchain technology to be implemented on their public sector in the near future but we cannot compare it with crypto currencies which is one of the application created using blockchain technology.

Even when we don't need the banks for transaction for cryptos there are 99% of people holding cryptos want to cash out their profits into fiat so banks will stay as long as people cashing out.

And besides, there would be no point for crypto investors to store their cryptos in the banks if they will be charged for storing it there so they will find it difficult to find clients and I can’t figure out in my mind how they are going to give interests to crypto holdings since cryptos especially bitcoin are too volatile. It would be better to keep them safely in their own digital wallet with no other hands controlling it.

Yes, cryptocurrency and blockchain technology gave the power to every individual work and handle their finance without third party interference. We really need to take some countries as a role model and make e-governance using a public blockchain. Estonia already made blockchain government and standing as forefront country in this world. Hope I wish my country also do the same soon. Nice answer as well.

As a crypto users we need to praise the country which made the regulations which make safer transaction with bitcoin and given power to the citizens also to involved in the crypto industry. Countries banned the bitcoin should be think the future of their financial ecosystem.

ATM frauds using EVM enabled machines widely to steal the data of the customers and scamming them, I am not sure, is this federal reserve bank is sleeping or what to predent the users from the centralized banking scams.

there is a huge difference between an ATM and a bank and there is no evolving from a point of sales  which , technically , ATMs are
and a full fledged bank , which is an institution , banking takes more than simply setting up a bitcoin vending machine
I already posted about the main banking principles and why a pure bitcoin bank is impossible
the main thing that is hampering introduction of legally complaint bitcoin banks - total legal grey zone surrounding bitcoin and cryptocurrencies
some countries ban it , other countries pretend it doesn't exist , only a few have laws that regulate it

granted there are already BTC atms with proper AML compliance from cyber security firms like Ciphertrace so it would make sense that a bank is the next evolutionary step

I do welcome developments that make it easier for businesses to actually provide their crypto related services to the users without having to worry about breaking the law, etc.

On the other hand, it's also interesting to see how people seem to discard what they initially liked about Bitcoin, which is that you no longer need a bank or any other greedy centralized financial institution.

The same applies how Bitcoin was seen as a payment tool because it was fast and cheap, and now it's just digital gold or an investment too-- either way, not what they initially praised Bitcoin for.

In my own opinion and view about op dream to combine bitcoin into fiat bank is very harder because bitcoin is not stable currency control by the government unlike fiat is stable control by the givernment compare it to bitcoin because the cause of volatility fluctuations.
For me no need to combine fiat bank into bitcoin online wallet from our smart phone is look like an online banking system that they can use for payment etc. regulation for bitcoin is the key to resolve all the problem regarding this issue to,follow the law of every country.

Even sooner really, if you take into account that today, we already have a handful of blockchain jurisdictions, with legal and banking frameworks being drawn up as we speak, that would allow for the creation of such a bank. It needs only political will, which should be fairly easy to obtain if there is enough financial backing. There are already private banks geared towards crypto, some are even now majority in crypto, it needs only a few to merge together to form a big Bitcoin banking conglomerate.

Bitcoin and bank still doesnt in a good terms till now and i dont think there are this what you called bitcoin bank existing anywhere. For now we still store our crypto in our wallet but not in a bank. Regarding loans , there are some people who are willing to lend crypto but with collateral. You can find them in the forum. Most of the transactions are man to man and there's no one to regulate it like banks.

To become a legal bank in a country, you should comply with the local law.
If you want to be a bank, you should implement AML & KYC too.
Let's say, you (as a bitcoin bank) will implement these AML & KYC regulations somehow, and you identify every customer before you let them do a wire transfer or withdraw their money.
In this case you'll be a real legal bitcoin bank but only a few people will use your services because most of the people nowdays use bitcoin and other cryptos because the lack of AML and KYC...

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10-20 years from now it is a good possibility.
The banking sector just have to understand that most crypto currencies cant be tracked easily and their source be determined rather easily. This is the main reason banks are afraid from cryptos, they dont know how to track them and understand  the money source.

The question is are they even allowed to have a bank which main currency is not their own fiat currency? I know some countries don't even allow other fiat currencies to have a bank based on their country. Cryptocurrencies are also on another level since we are talking about a unregulated kind of currency here which in terms of the authorities having control over it is lesser compared to their own fiat currency. I know some banks already send loans via Bitcoin in order to avoid transfer fees but I don't think that banks can be gully backed up by an unstable currency.

bitcoin bank is an oxymoron itself
banking depends on several major principles and pure bitcoin "banking" contradicts many of them
take , for example , the principle of liquidity : this means that you should be able to convert asset into cash in a short time without a loss
bitcoin is volatile and its price is unpredictable , you cannot expect to keep your assets in bitcoin and gain profit - its  a risk and very often a huge loss when you are selling in the wrong period of time
the principle of loans and investment - the loans in bitcoins will be converted into cash anyways , there is simply not enough places to accept bitcoins if you are starting your own business and buying all the necessary things for it etc.etc.
so far we can only dream about a bank that accepts and stores and allows to exchange bitcoins among other assets and fiat currencies equally and legally
and a pure bitcoin bank is something that would never happen , I'm afraid

the underlined sentence above is the reason why we still need a bitcoin bank  . in bitcoin you cant loan inside the wallet that you use but on bitcoin banks you can make a loan in bitcoin of course if ever you need some bitcoin for emergency porpuses   . bitcoin banks do also have a solid security compare to the old wallet that you use but the downside is that they are bieng controlled by a real person  .  i know this is the reason why someone will hate bitcoin banks  .

My answer is no, despite the overwhelming amount of "yeses" within this thread.

However, the reason is not that there is a lack of demand for such a facility, or even that it's not technically feasible - these prerequisites can both be fulfilled. The problems arise from the regulator's side, where with the tightening regulations, being completely legally compliant comes at an extremely large cost, especially when you compound that with the already high establishment costs of a physical storefront.

Maybe if you shifted the criteria to "virtual & physical" instead of physical only, there would be a higher possibility. But for a physically operational bank to completely shift their loan and savings denominations to bitcoin, all the while complying with every clause of every regulation, is next to impossible at this stage.

In overall read its a pure nonsense on what he do tries to pertain.Bitcoin bank or crypto bank is totally an impossible thing to have.Why would we need these ones yet we are our own banks.It might have some features that crypto no have but its always been good to the feeling that we do have the full control of our own coins if its being store with our own crypto wallets.We don't need banks. period.

I am pretty sure Babel Finance is what you are seeking https://babel.finance/

And what are you expecting to loan, fiat? If it is a bitcoin bank or cryptocurrency bank then they keep cryptocurrency so that will be another thing if you are expecting to take a loan in fiat and use your deposited cryptocurrency as collateral because you can just cash out your deposited cryptocurrency  or else you will need to loan bitcoin and make other assets as collateral.

Right now there is no demand for it, but it's a good idea, but there will be compliant issues that is going to happen once the preparation for the setting up happens, because banking and cryptocurrency decentralization has a huge difference.

Yes, cryptocurrency banks are already emerging, and I have already participated in several ICO projects that have positioned themselves as cryptocurrency banks. I, however, do not know how viable such banks will be. We must first observe the work of such banks, what services they will provide and to what extent their services will be in demand. Due to the high price volatility of cryptocurrency, the efficiency of such banks may be very low.

We understand the true purpose of bitcoin but how about purchasing your first coin, you need to send fiat currency or the help of credit cards to purchase the coins, either way we need the help of financial institutions to get hold of bitcoin but that does not mean that we need bitcoin bank, what we need is a collaboration between the banking sector and the bitcoin echo system  .

Don't we already have legally compliant bitcoin banks? They may not call themselves banks but if you have corporations offering custodial service for crypto, offering loans for crypto, and some even offering interest for your crypto savings, then I would call them banks in any other industry, don't you think?

So they're here already:)

I could say yes as many banks are now successfully in partnership of some local exchanges in which crypto users could use the banks withdrawal facilities everytime they convert to fiat or use Bitcoin in direct spending with some banks merchants then i could think that many businesses are now thinking of a Bitcoin bank specially in the place where Bitcoin is legal.

Yeah, I never understood why people think banks will roll over and die once crypto takes off. Bottom line is that people trust them with their money, and will likely continue to do so regardless of the medium. It would be trivial for them to integrate crypto related services regardless of their current stance. I can see people maybe relying on them less, but they're not going anywhere.

It won't just be Bitpay and Coinbase -- in fact, I think they are underdogs in this game. Within a decade, I think we'll see legacy retail banks like Chase, Bank of America, etc. offering cryptocurrency deposit and investment accounts alongside fiat accounts. We're seeing the institutional side take off already, with involvement from Fidelity, Morgan Stanley, the ICE, CME Group, etc. When Bitcoin gets big enough, this will expand into the retail sector.

It's a shame, but that's the direction I see things heading.

That kind of feature will be against to what bitcoin is, a decentralized currency.

In the future, banks will necessarily provide various services in cryptocurrency. At a minimum, this will be a cryptocurrency exchange for a common currency. The provision of other services, including lending in cryptocurrency, opening and servicing of cryptocurrency accounts, will primarily depend on the degree of legalization of cryptocurrency by states and the creation by the government of necessary by-laws for the practical implementation of cryptocurrency, in particular, the forms and methods of banks with cryptocurrency. Only when there are specific instructions, banks will be able to work with cryptocurrency. It is still difficult to predict what will come of this, given the high price volatility of cryptocurrency.

Whether you're referring to a crypto friendly bank or an actual bank for crypto, I honestly don't see the use of it. Bitcoin is everything that banks are against, I don't see them going together, to be honest, but that doesn't mean that we won't see services trying to do so, I can actually see BitPay or Coinbase doing this because, for me, they both look like they are trying to centralize crypto or at least, change it to something that is not. And trust me, it's not gonna take that many years, it's probably just around the corner.

I find it difficult, because the bitcoin market is very volatile and the scope of use is very limited, and more legal frameworks for bitcoin are needed.

I think that it's not something that is necessarily required in order for the bitcoin ecosystem to thrive. Especially when you consider the fact that non-physical versions of the same thing is already about, and they haven't really gained much traction at all. BTC users are always skeptical when they're dealing with a third party that holds their funds.

But I think it's a matter of time before the type of institution that you describe pops up. The question is really in which jurisdiction/country. It's most likely going to be in a country with positive regulation, that is willing to promote crypto businesses, which isn't really a lot right now.

It all comes down to what the regulatory bodies think, though. The concept is doable, and is not new.

I think that cryptocurrency banks will arise and exist in the near future. I already read that, in my opinion, a cryptocurrency bank is already operating in Sweden. In addition, in this forum I have already seen two ICO campaigns, the purpose of which was to create a cryptocurrency bank.
However, ultimately, whether they will develop or not will depend on whether there will be a demand for their services. They have the right to exist, and time will tell how much they will be in demand.

More importantly, would you trust the bank touting it?

There've been plenty of attempts making big claims. They were all nobodies and all amounted to nothing, or actively set everyone's money on fire a la Neo & Bee.

The only way it would get anywhere is if an existing bank did it. Otherwise it's probably going to be yet another scam.

Many still prefer the "comfort" of banks, that's why they continue to want to integrate it with crypto. Unless there come's a day wherein a special bank is formed, one that would offer different services and cater to the needs of crypto users. However, I don't see much need for it. It would provide "security" for those who are doubtful of the use of bitcoin, but then its decentralization would just be then useless unless there's a way for it to be a third party bank. Anyway, there are already many better ways for us to store crypto, plus keeping it for interest seems pointless. There are many bitcoin debit cards and ATM machines already appearing from third party providers so I think that those would suffice already.

I think there's a chance to make it real but not in the near future. Many people don't trust crypto, or have never even heard of it

right ... son ...
banks for bitcoin are not possible because it is not possible to apply banking rules as a whole in a bitcoin order because bitcoin is different. you will not get interest by saving bitcoin because you can get interest with promising rewards in market exchange

All it would take is a few violent moves and the bank is totally screwed. There's no way loans and crypto will ever work smoothly together.

What most people will want is a bank that seamlessly interacts with fiat and crypto. Since such a bank would be a little fish in a big pond it would be bullied out of business.

It would be just a DREAM!

We know on whats the true purpose on why Bitcoin is created on the first place.Right? which is without going through any financial institution and with
this alone we would know that this so-called bitcoin bank wont be possible even it would exist i doubt that no one would use it up.
Collaborating Bank and Bitcoin?its hard to believe on.

I have mentioned this bank/website before called Bitbond and in my opinion this is the closest business which future crypto banks will look like. Bitbond became popular ever since Reuters made an article about their loaning business that allow them to have international clients who can have the money in seconds with the use of cryptocurrencies.

But to answer your question will there ever be a crypto bank acting like a regular bank in the future? I guess the answer is a big no as there are other purposes of banks which we don't usually see. Aside from the regular loans and savings accounts we see often, banks are also in charge of underwriting of shares, mergers and acquisitions, as well as stock brokerage services and many others which I don't think a crypto specialize bank can handle when both of their experience and capital is lacking. The crypto industry doesn't need its own bank to be successful it only needs us to keep it alive.

While the community wants to move away from centralized cartels, you are just trying to put the balls in one basket! Why do we need banks for cryptocurrencies while we can have access to our funds all the time? Are you looking for banks to provide custodian services to your bitcoins?? Or give you a mare interest on your holding??

We will certainly see fully digital banks in future which will solely operate in virtual currencies issued by central banks but it is better if we don't see bitcoin banks becoming a reality!!

I know banks in our country entertaining cryptocurrency transactions, however, banks that focuses on crypto business may happen way too far in the future. We are all aware that the government may accept crypto adaptation, yet they are skeptical supporting it to the full extent.

Yes you are right! How people dream about bitcoin bank is altogether fake. It's very much against the basic principles of BTC as how would banks give an interest on BTC which is a deflationary currency and cannot be further used to make profits. Moreover, providing loans in form of BTC to an address where borrower holds the private key is also very risky as he at his own option can do anything with the funds and opt not to return. Without any legal remedies available recovering the debt would be pretty hard. So even if we want BTC to operate as a secondary currency we can think of Banks legitimately allowing crypto withdrawals and selling directly through ATM. This can be possible through direct tie-ups with exchanges As banks can assist them in the process of selling cryptocurrencies and making people available cash at counter.

Having said all this. Without governments agreeing to bring Cryptos in central system It is basically nothing but a dream as no Bank would be happily involved in it because almost every institution in every country has to register itself under some central authority to call itself a Bank and these authorities put constraints on banks to control the flow of money & hold some typical type of assets. When more and more people will ask for crypto withdrawals Bank has to render them withdrawals and getting cryptocurrencies in return. Even if think that depository services are also open still it will be too difficult to create an equilibrium so that deposits are roughly around withdrawals so banks don't have to hold a lot of cryptocurrencies. So without governments support Things will be too complicated to even dream for.

I do not think what you say is true. Bitcoin is an independent currency from banks. You do not need to create a bank account to use it. If this happens, you weaken this technology. It's like downloading the latest Android system on an old cell phone.
The technology based on Blockchain and directed to bank system is XRP.

A dream, and a distant one at that. Fiat banks are already fully-operational, and can pretty much integrate the things you mentioned into their platform. Crypto-only banks would struggle to make its footing in the financial world and would be having a hard time to get some operational profit, knowing how limited their scope is and how little their target market is compared to commercial banks.

Also, bitcoins and crypto are aimed to make people their own banks without relying to third-party services, so..

I think that the "bitcoin bank" name is misleading. In my head (and others' too) Bitcoin bank would be a "bank" where you "deposit" Bitcoin and get interest. Of course, such thing could not be great and it's not what you ask for.

So a better name could be "Bitcoin friendly bank" although there are already a couple of banks or banking services that are not that "cold" towards Bitcoin, allowing withdraw from exchanges and also offering services to buy Bitcoin for you.

I guess that you know all this. What I want to say is that we already have a few "friends" and the banks overall seem to get more friendly towards Bitcoin with every new day passing. So a bank offering full services, from exchange (or work with an exchange) to cards and such is just a not-so-far step. Incorporating Bitcoin capabilities into their ATMs is also a not so difficult next step. We are close to that, your 10 years number may be already big.

The question about the demand is, however, a very good one. Banks usually operate with high fees. So although more convenient, buying/selling Bitcoin though a bank will be more expensive (in the same way converting EUR/USD/local currency is much cheaper at an exchange office than at the bank). There will be demand for it, but I don't think it will be that big. Of course, it will add legitimacy, which will translate into increasing demand.

I am wondering if it is possible that there would be a physical bank operating somewhere that is fully compliant with the banking laws but focusing on cryptocurrency business? I mean a bank that can be providing the usual banking services but all things are tied to bitcoin or cryptocurrency.

The bank should offer bitcoin debit and credit cards and of course will operate bitcoin ATM machines. In the bank you can file a loan with your bitcoin or crypto as the collateral. Maybe even have the facility where you can deposit your bitcoin under the bank's safety platform.

Is this just a dream or is there a possibility that this can happen eventually maybe 10 or 20 years from now? Or maybe in the first place there is no need nor demand for this?