Topic: OCC recommend banks to offer private key vaults to customers - page 2. (Read 214 times)

I do not think the suggestion is about the bank having a hold of the private key in data form but rather in physical form where the owner of the private key will have their physical backup stored in a bank's vault.  I also think that it is safe to keep our physical backup of keys in banks since banks had been proven to keep the physical asset in a safe condition and if something irregular happens, they have it covered.

This is the service I think banks can take advantage of Bitcoin enthusiasts and may be one of the sources of income of banks.

I don't understand why we should entrust the keys to our non-custodial wallets to a custodial bank. The concept seems nonsensical to me. I wouldn't store anything related to cryptocurrency, such as private keys, in such a place. However, I agree that hardware wallets could be a suitable option for storage if necessary. With hardware wallets, it's important to note that none of the funds can be moved from the device without the password. Nevertheless, I personally don't feel secure storing my seeds or private keys with a third party.

These banks would really be trying out to play along with this current trend specially that Bitcoin/Crypto could really bring out that potential revenue for them as an add up but of course it would really be depending if it would be allowed on such country or place. We know that there are lots of countries which arent really that open for such situation at any cost. These institutions are really that heavily
centralized or regulated on which it would really be just that normal that they would be taking into an approach that they would be sticking on where government do prefer.
Yes, they could offer that kind of feature on storing up that privatekeys for its users or to those who would tend to make use of their service but its true that it is really that
contrary on why cryptocurrency does exist which is to be your own bank and we can see that contradictory thing.

Why would I want to forfeit the ownership of my coins to a bank? Unless there's an appealing interest, there is none. Bitcoin was created for the very purpose of avoiding intermediaries. It's obviously safer if you take the time to do proper setup, but I'd rather focus on the fact that it's easier. This wasn't possible before, with gold, and in this century with the ease electronic fiat provides (which requires handing over custody). Bitcoin combines this ease without losing the custody.

They'll need some pretty good marketing. 

Thats the point i want to drive at. Its a good idea for banks to try or wish to pick a page out of the decentralized system in blockchain technology and the goods that cryptocurrency hace got to offer but, having centrlized systems mixed with a decentralized system would be some hard to archive innovation.
You can't call it private when someone else, a nlt so pro bitcoin organisation is in charge of the safe keepong of your private key... thats some risk as they could still with hold your access by refusing you access to your keys. Its a bad idea.

It is a good idea, and banks can provide such a service if they want to, and it will also increase the rate of Bitcoin adoption globally; however, I see it as the same service that centralized exchanges provide because banks will be in charge of the customers' private keys, as centralized exchanges are, and there will be no privacy.

In the case of some nations that have not legalized Bitcoin, banks will find it difficult to implement such a method because the government will not allow banks to utilize Bitcoin because it is not legal in the country.

This is a smart move that could attract more people to the cryptocurrency space. Banks a good at advertisement and can penetrate the financial sector of the economy because they enjoy the support of the government. But I don't see much difference between the proposed service and the services provided by exchanges. The only difference is that banks are insured by deposit insurance which means depositors might be able to get back their deposits if these banks fail.

Since 2020 when the Office of the Comptroller of the Currency (OCC) advised banks to engage in this crypto safekeeping and custody services, I cannot find any bank that embraced such service except Bank of New York Mellon (I might be wrong). I don't also know how the banks intend to handle the risk involved in keeping crypto assets. The truth remains that with the constant failure of some regional banks, keeping your asset with them will be very risky. And most of these banks don't have relevant cybersecurity tools which can make them prone to attacks. I will always prefer to keep and own my Bitcoin.  

Imo there is trust issue problem on this since both party can accused each other in event that a hacker or an inside job happened on that specific wallet. The user can mix the coin then pretend it was hacked and blame the banks for the loss while the banks can do the other way around.

This kind of situation which both party holds the private key on the asset can create a blaming and stealing game to each other. This is how the way I understand the scenario under this circumstances.

Bitcoin will really definitely be a game changer if the banks will be allowed to make cryptocurrency transactions in places where it has been restricted, it will also serves a synergy between the two of them that will encourage the bitcoiners to have more commitment to the use of banks and every bank user to have same opportunity of using bitcoin and maintaining have a cryptocurrency account with them in the bank, just that banks will only have to maintain bitcoin alone in cryptocurrency inbothwr for them to maintain their reputation from other cryptocurrencies that end up along the way.

All I see is an entrepreneur just thinking about how to benefit his business from the trend. If banks buy the idea, they will imprison people's assets more than they are already doing, because some individuals who are too lazy to take responsibility for their own security will be the first to rush and taste the new banking features, thinking they have all arrived. But it's actually better than the bank doing nothing and being racist over Bitcoin. But there will actually be a high seizure of assets by government officials, just like they do over account restrictions. If there is any suspicion over any one's fund, they will take over the user's assets without the person's permission.

Unless they create something like a self-custodial system where depositors will be allowed to create a key using the system, but the key won't be stored in their database, and this key can only be used by the deposit for all forms of withdrawal within the banking sector and the bank won't have any form of access over the wallet, the bank will try to offer some form of sales service, which might at some point break the buyer's privacy since they are the ones selling crypto to the buyer and they might take note of the wallet. They can make their small gain from selling and buying with their addiction's little charges; that way, I believe people might actually want to patronize them, and if not, I see no difference from actually using the bank for savings and buying crypto and handing it over to them to still steal.

If you can use centralized exchanges, you can accept those services from banks.

I don't see differences as centralized exchanges and banks, like in this discussion, own private keys while their customers don't own any key. I am sure that service will help Bitcoin to be accepted more but I only consider it as a start for Bitcoin newbies. They can use banks as their first gates to access Bitcoin but after that, they must learn to use non custodial wallets.

Not your keys, not your coins. I hope if they use such services, they won't pay big cost before they know what non custodial wallet is good to use and actually use such wallet to store their coins.

https://chainsec.io/checklist/

It is not a new idea, it has been talked about for years and some banks have already received permission to do exactly what you are writing about now. Of course, such a method of access is very easy for the bank's clients, but completely pointless if it is a custodial service, similar to any CEX that many use as a "crypto bank".

People who do not buy Bitcoin to use it as a currency and only want profit without too much worry will certainly choose this option, only that first of all they should be warned about all the risks arising from the custodial service. Banks will certainly (at least some) accept to enable this kind of service, but storage and fees in that case will certainly not be negligible.

The only benefit I see in this way of purchase is that the client does not have to do a new KYC, given that the bank already knows all the information, and if they also gave clients the option of withdrawing to non-custodial wallets, it would be a solid option for many who are looking for easy way to enter the crypto market.

The Office of the comptroller of the currency in an article provides different ways that banks can impact cryptocurrency or bitcoin. In one of their letters, they advised banks that bitcoin can help them make more profits, but one of the suggested business ideas is awkward in the cryptocurrency sense.


If the bank adopts such a business technique of impacting the cryptocurrency space, it could help the market, but it's not advisable for banks to hold their customer's private keys; the security can be guaranteed since they save different assets for people too. If a hacker gets to their database, unless they save it in a paper, it'll be disastrous. Hence, I see positive reactions to the idea, many banking customers getting into crypto is a good wave, entering the market on the wrong side is a disadvantage to them.