Topic: Would you be interested in a Bitcoin Credit Union? (Read 3433 times)
I'd very strongly suggest trying to get in touch with an exec from BancVue if serious. They can help you out a ton with start-up, logistics, and shared branching. Trying to get a sit-down around the time of a trade show would probably be your best bet. https://www.bancvue.com/about/upcoming-events.html
If you never intend to touch fiat at all you don't need to apply to be a credit union. Credit unions don't deal with commodities. You can just set that up as a club or non profit for tax purposes. Maybe apply for a 501c. Are you planning on being for profit or nonprofit?
The credit union is necessary to get a routing number to be used for direct deposit.
So you are planning on accepting deposits in fiat? I guess I got confused by franky1s post. A bank or credit unions routing number or numbers are used to identify a financial institution usually for the ACH and wire transfer system. The hurdles you will jump through to be a bank will require lots of employees and attorneys. If you are crossing state lines you will need to comply with interstate banking and branching laws which will add more employees. If you're going to deal with international customers too you may need to hire everyone on this forum to help. That's the reason these startups go out and secure big money investors first.
Seriously, I'm not sure you could ever accomplish that without being more expensive than Circle or Coinbase.
The main focus would be on the ACH to access the Electronic Payments Network which allows a "depository institution" as defined in § 19(b) of the Federal Reserve Act, 12 U.S.C. § 461(b), this includes "insured credit unions".
“Federal credit union” means a cooperative association organized in accordance with the provisions of this chapter for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes;
The term “insured credit union” means any credit union the member accounts of which are insured in accordance with the provisions of subchapter II of the Federal Credit Union Act.
For a credit union maintaining less than $50 million in deposits it is not too difficult to maintain insurance on users accounts. Especially since the Bitcoin credit union would never hold any fiat in accounts. It would immediately transfer any funds into bitcoins or to another bank account for deposit.
You also need to understand that a direct deposit is little different then accepting a check (the fraud risk is reduced however) as direct deposits can be reversed for a number of reasons. A direct deposit can be charged back and can be "nsf". These are pretty rare, and really only happen with smaller businesses but even then they don't happen very often because most businesses make paying their employees a top priority.
The biggest risk is getting a direct deposit that is initiated by the customer. A few banks allow this, ING direct (which is now owned by capital one) was one of the first banks that started this, but others have jumped on the bankwaggon. I understand that there is no balance requirement for a direct deposit to be sent, but it will be reversed by the issuing bank in the event of NSF in the sending account.
This sounds a lot like coinbase but with extra regulatory costs and risks. I would suggest creating a service similar to coinbase with similar risk controls and your service will take off.
If someone wanted to use their entire paycheck (or any other amount) to buy bitcoin they could simply setup an automatic purchase with coinbase
One disadvantage you would have over coinbase is that no one would be selling their bitcoin to you (which would allow you to save on slippage and exchange fees) so from the start you will have higher costs for providing the same service.
Without people being paid in Bitcoin we will forever be in the mindset of "buying bitcoins". At some point we will need to transition from buying bitcoins to buying fiat for the few things Bitcoin does not provide.
I am not, and would not think of, doing this alone as a business. I am in IT, just to apply yuo need someone with CPA or banking experience as the director and the members elect a board. I can help facilitate but cannot do it on my own, there would need to be community support of 500 to 3000 people showing an interest.
I don't think this will ever happen, especially in developed countries. In theory people could use bitcoin as their main currency in third world countries that have very unstable economies. I am not, and would not think of, doing this alone as a business. I am in IT, just to apply yuo need someone with CPA or banking experience as the director and the members elect a board. I can help facilitate but cannot do it on my own, there would need to be community support of 500 to 3000 people showing an interest.
I think the costs are simply too high in order for a bitcoin CU to be a viable option. (and there are too many cheaper alternatives)
I personally love the idea however from a regulation standpoint I can see it being VERY difficult to pick up off the ground.
Anything that would make bitcoin progress, I will support!
Why should you support something like this? It will surely create chaos anytime soon.
Without people being paid in Bitcoin we will forever be in the mindset of "buying bitcoins". At some point we will need to transition from buying bitcoins to buying fiat for the few things Bitcoin does not provide.
I am not, and would not think of, doing this alone as a business. I am in IT, just to apply yuo need someone with CPA or banking experience as the director and the members elect a board. I can help facilitate but cannot do it on my own, there would need to be community support of 500 to 3000 people showing an interest.
I am not, and would not think of, doing this alone as a business. I am in IT, just to apply yuo need someone with CPA or banking experience as the director and the members elect a board. I can help facilitate but cannot do it on my own, there would need to be community support of 500 to 3000 people showing an interest.
If you never intend to touch fiat at all you don't need to apply to be a credit union. Credit unions don't deal with commodities. You can just set that up as a club or non profit for tax purposes. Maybe apply for a 501c. Are you planning on being for profit or nonprofit?
The credit union is necessary to get a routing number to be used for direct deposit.
So you are planning on accepting deposits in fiat? I guess I got confused by franky1s post. A bank or credit unions routing number or numbers are used to identify a financial institution usually for the ACH and wire transfer system. The hurdles you will jump through to be a bank will require lots of employees and attorneys. If you are crossing state lines you will need to comply with interstate banking and branching laws which will add more employees. If you're going to deal with international customers too you may need to hire everyone on this forum to help. That's the reason these startups go out and secure big money investors first.
Seriously, I'm not sure you could ever accomplish that without being more expensive than Circle or Coinbase.
The main focus would be on the ACH to access the Electronic Payments Network which allows a "depository institution" as defined in § 19(b) of the Federal Reserve Act, 12 U.S.C. § 461(b), this includes "insured credit unions".
“Federal credit union” means a cooperative association organized in accordance with the provisions of this chapter for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes;
The term “insured credit union” means any credit union the member accounts of which are insured in accordance with the provisions of subchapter II of the Federal Credit Union Act.
For a credit union maintaining less than $50 million in deposits it is not too difficult to maintain insurance on users accounts. Especially since the Bitcoin credit union would never hold any fiat in accounts. It would immediately transfer any funds into bitcoins or to another bank account for deposit.
You also need to understand that a direct deposit is little different then accepting a check (the fraud risk is reduced however) as direct deposits can be reversed for a number of reasons. A direct deposit can be charged back and can be "nsf". These are pretty rare, and really only happen with smaller businesses but even then they don't happen very often because most businesses make paying their employees a top priority.
The biggest risk is getting a direct deposit that is initiated by the customer. A few banks allow this, ING direct (which is now owned by capital one) was one of the first banks that started this, but others have jumped on the bankwaggon. I understand that there is no balance requirement for a direct deposit to be sent, but it will be reversed by the issuing bank in the event of NSF in the sending account.
This sounds a lot like coinbase but with extra regulatory costs and risks. I would suggest creating a service similar to coinbase with similar risk controls and your service will take off.
If someone wanted to use their entire paycheck (or any other amount) to buy bitcoin they could simply setup an automatic purchase with coinbase
I think we have Coinbase for that. But don't be fed up. This is the sort of initial thinking that might lead to the biggest community in the world. So keep on expressing your thoughts.
If you never intend to touch fiat at all you don't need to apply to be a credit union. Credit unions don't deal with commodities. You can just set that up as a club or non profit for tax purposes. Maybe apply for a 501c. Are you planning on being for profit or nonprofit?
The credit union is necessary to get a routing number to be used for direct deposit.
So you are planning on accepting deposits in fiat? I guess I got confused by franky1s post. A bank or credit unions routing number or numbers are used to identify a financial institution usually for the ACH and wire transfer system. The hurdles you will jump through to be a bank will require lots of employees and attorneys. If you are crossing state lines you will need to comply with interstate banking and branching laws which will add more employees. If you're going to deal with international customers too you may need to hire everyone on this forum to help. That's the reason these startups go out and secure big money investors first.
Seriously, I'm not sure you could ever accomplish that without being more expensive than Circle or Coinbase.
The main focus would be on the ACH to access the Electronic Payments Network which allows a "depository institution" as defined in § 19(b) of the Federal Reserve Act, 12 U.S.C. § 461(b), this includes "insured credit unions".
“Federal credit union” means a cooperative association organized in accordance with the provisions of this chapter for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes;
The term “insured credit union” means any credit union the member accounts of which are insured in accordance with the provisions of subchapter II of the Federal Credit Union Act.
For a credit union maintaining less than $50 million in deposits it is not too difficult to maintain insurance on users accounts. Especially since the Bitcoin credit union would never hold any fiat in accounts. It would immediately transfer any funds into bitcoins or to another bank account for deposit.
You also need to understand that a direct deposit is little different then accepting a check (the fraud risk is reduced however) as direct deposits can be reversed for a number of reasons. A direct deposit can be charged back and can be "nsf". These are pretty rare, and really only happen with smaller businesses but even then they don't happen very often because most businesses make paying their employees a top priority.
The biggest risk is getting a direct deposit that is initiated by the customer. A few banks allow this, ING direct (which is now owned by capital one) was one of the first banks that started this, but others have jumped on the bankwaggon. I understand that there is no balance requirement for a direct deposit to be sent, but it will be reversed by the issuing bank in the event of NSF in the sending account.
you dont need to hire an expensive financial attorney in the early "idea" phase. just ask to have a meeting with a credit union organiser (its free) and they have gone through all the red tape and know what is needed and what is not. then once you know exactly how to best obtain a direct deposit number for individuals to use for their employers. then you can go into phase 2 of attorneys and paperwork.
i still think the fastest way to achieve individual account numbers is the prepaid visa card route or partner with an existant credit union
i still think the fastest way to achieve individual account numbers is the prepaid visa card route or partner with an existant credit union
If you never intend to touch fiat at all you don't need to apply to be a credit union. Credit unions don't deal with commodities. You can just set that up as a club or non profit for tax purposes. Maybe apply for a 501c. Are you planning on being for profit or nonprofit?
The credit union is necessary to get a routing number to be used for direct deposit.
So you are planning on accepting deposits in fiat? I guess I got confused by franky1s post. A bank or credit unions routing number or numbers are used to identify a financial institution usually for the ACH and wire transfer system. The hurdles you will jump through to be a bank will require lots of employees and attorneys. If you are crossing state lines you will need to comply with interstate banking and branching laws which will add more employees. If you're going to deal with international customers too you may need to hire everyone on this forum to help. That's the reason these startups go out and secure big money investors first.
Seriously, I'm not sure you could ever accomplish that without being more expensive than Circle or Coinbase.
The main focus would be on the ACH to access the Electronic Payments Network which allows a "depository institution" as defined in § 19(b) of the Federal Reserve Act, 12 U.S.C. § 461(b), this includes "insured credit unions".
“Federal credit union” means a cooperative association organized in accordance with the provisions of this chapter for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes;
The term “insured credit union” means any credit union the member accounts of which are insured in accordance with the provisions of subchapter II of the Federal Credit Union Act.
For a credit union maintaining less than $50 million in deposits it is not too difficult to maintain insurance on users accounts. Especially since the Bitcoin credit union would never hold any fiat in accounts. It would immediately transfer any funds into bitcoins or to another bank account for deposit.
Maybe that's your loophole. Since your not going to hold fiat for any great length of time. Credit unions still need to comply with banking laws and AML/KYC. You really need to get the advice of an attorney that specializes in banking law before going any further. That will save you money, headaches and jail time in the future.
One question though, why would you even consider opening a business like this in the fascist USA? You're not in the US, you don't need to bank here, the laws are meant to support the status quo, cripple new entry and innovation, the whole government is corrupt and the people are blind to it. Is Germany a worse place to have a financial institution?
If you never intend to touch fiat at all you don't need to apply to be a credit union. Credit unions don't deal with commodities. You can just set that up as a club or non profit for tax purposes. Maybe apply for a 501c. Are you planning on being for profit or nonprofit?
The credit union is necessary to get a routing number to be used for direct deposit.
So you are planning on accepting deposits in fiat? I guess I got confused by franky1s post. A bank or credit unions routing number or numbers are used to identify a financial institution usually for the ACH and wire transfer system. The hurdles you will jump through to be a bank will require lots of employees and attorneys. If you are crossing state lines you will need to comply with interstate banking and branching laws which will add more employees. If you're going to deal with international customers too you may need to hire everyone on this forum to help. That's the reason these startups go out and secure big money investors first.
Seriously, I'm not sure you could ever accomplish that without being more expensive than Circle or Coinbase.
The main focus would be on the ACH to access the Electronic Payments Network which allows a "depository institution" as defined in § 19(b) of the Federal Reserve Act, 12 U.S.C. § 461(b), this includes "insured credit unions".
“Federal credit union” means a cooperative association organized in accordance with the provisions of this chapter for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes;
The term “insured credit union” means any credit union the member accounts of which are insured in accordance with the provisions of subchapter II of the Federal Credit Union Act.
For a credit union maintaining less than $50 million in deposits it is not too difficult to maintain insurance on users accounts. Especially since the Bitcoin credit union would never hold any fiat in accounts. It would immediately transfer any funds into bitcoins or to another bank account for deposit.
If you never intend to touch fiat at all you don't need to apply to be a credit union. Credit unions don't deal with commodities. You can just set that up as a club or non profit for tax purposes. Maybe apply for a 501c. Are you planning on being for profit or nonprofit?
The credit union is necessary to get a routing number to be used for direct deposit.
So you are planning on accepting deposits in fiat? I guess I got confused by franky1s post. A bank or credit unions routing number or numbers are used to identify a financial institution usually for the ACH and wire transfer system. The hurdles you will jump through to be a bank will require lots of employees and attorneys. If you are crossing state lines you will need to comply with interstate banking and branching laws which will add more employees. If you're going to deal with international customers too you may need to hire everyone on this forum to help. That's the reason these startups go out and secure big money investors first.
Seriously, I'm not sure you could ever accomplish that without being more expensive than Circle or Coinbase.
If you never intend to touch fiat at all you don't need to apply to be a credit union. Credit unions don't deal with commodities. You can just set that up as a club or non profit for tax purposes. Maybe apply for a 501c. Are you planning on being for profit or nonprofit?
The credit union is necessary to get a routing number to be used for direct deposit.
Direct deposits use the FedACH system. If you accept fiat via FedACH then transfer it to Coinbase for conversion you will need to have all the headaches and licenses in place that banks have. If you're going to also deal in fiat you're going to need an experienced compliance officer for AML/KYC. I think Charlie's available if you need someone now. lol
yep, trying to join the ACH network is a big hurdle. if it was as easy as a $50k investment, then EVERYONE would start their own bank brands, but there is only a few in reality, which shows its not easy or cheap.
however as mentioned in the last post, people having their own debit card to 'top up' give their employer the deposit details. and then elwar in partnership with a bitcoin debit card company working the other direction (bitcoin->fiat). can work together to swap fiat for coin internally rather than relying on fluctuating exchanges
I agree, it would not make sense to use an exchange. Working either with a bitcoin debit card company or directly with high volume miners would allow for getting exchange rates without the overhead of the exchange.
Considering the amount and time would be fairly consistent it would be easier to negotiate ("Our current fiat amount is $385,000 every Friday increasing at an average rate of 5% per month.."). Might even be able to negotiate a rate better than exchanges to cover the minimal costs of operation.
Working with debit card companies will make it much easier...most of a credit union's costs come from offering fiat services. Holding zero balances would cut out most of the cost.
If you never intend to touch fiat at all you don't need to apply to be a credit union. Credit unions don't deal with commodities. You can just set that up as a club or non profit for tax purposes. Maybe apply for a 501c. Are you planning on being for profit or nonprofit?
Anything that would make bitcoin progress, I will support!
Direct deposits use the FedACH system. If you accept fiat via FedACH then transfer it to Coinbase for conversion you will need to have all the headaches and licenses in place that banks have. If you're going to also deal in fiat you're going to need an experienced compliance officer for AML/KYC. I think Charlie's available if you need someone now. lol
yep, trying to join the ACH network is a big hurdle. if it was as easy as a $50k investment, then EVERYONE would start their own bank brands, but there is only a few in reality, which shows its not easy or cheap.
however as mentioned in the last post, people having their own debit card to 'top up' give their employer the deposit details. and then elwar in partnership with a bitcoin debit card company working the other direction (bitcoin->fiat). can work together to swap fiat for coin internally rather than relying on fluctuating exchanges
I agree, it would not make sense to use an exchange. Working either with a bitcoin debit card company or directly with high volume miners would allow for getting exchange rates without the overhead of the exchange.
Considering the amount and time would be fairly consistent it would be easier to negotiate ("Our current fiat amount is $385,000 every Friday increasing at an average rate of 5% per month.."). Might even be able to negotiate a rate better than exchanges to cover the minimal costs of operation.
Working with debit card companies will make it much easier...most of a credit union's costs come from offering fiat services. Holding zero balances would cut out most of the cost.
Direct deposits use the FedACH system. If you accept fiat via FedACH then transfer it to Coinbase for conversion you will need to have all the headaches and licenses in place that banks have. If you're going to also deal in fiat you're going to need an experienced compliance officer for AML/KYC. I think Charlie's available if you need someone now. lol
yep, trying to join the ACH network is a big hurdle. if it was as easy as a $50k investment, then EVERYONE would start their own bank brands, but there is only a few in reality, which shows its not easy or cheap.
however as mentioned in the last post, people having their own debit card to 'top up' give their employer the deposit details. and then elwar in partnership with a bitcoin debit card company working the other direction (bitcoin->fiat). can work together to swap fiat for coin internally rather than relying on fluctuating exchanges
Interested is a good work.
Direct deposits use the FedACH system. If you accept fiat via FedACH then transfer it to Coinbase for conversion you will need to have all the headaches and licenses in place that banks have. If you're going to also deal in fiat you're going to need an experienced compliance officer for AML/KYC. I think Charlie's available if you need someone now. lol
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