Bitcoin Forum

Banks use tools as a store of value by holding some assets in reserves, for various economic benefits. Although, adopting Bitcoin in such capacity, would have it's pros and cons.  Obviously like controlling inflationary trends, and even help stabilize the volatility of Bitcoin to  its users, and conversely such volatility could also alter the stability of a banks statement of financial position. All these could add up to a more stable global economy. Surely banks have started to think of such prospect

Banks can do things they want even under regulations from governments and central banks as well as other regulatory agencies. They have never been a trustable and safe places for storing your fund especially in long term.

You mentioned about banks and their activities of using some tools for their benefits - which I think wealth growth potentiality. By chasing wealth, they take risk and they can use customer's funds deposited to their banks in shady, untransparent and also very risky ways. Customers can not know all activities behind the scene do by banks and they only know part of it when banks start death spirals or collapse.

It's super risky and to avoid such uncontrollable risks, you can store your property, wealth in Bitcoin. With Bitcoin, it's very easy and you can manage it all by choosing an open-source and non-custodial wallet for storing your bitcoin, having your own Bitcoin bank.

Events made you scare about custodial wallets, centralized exchanges. (https://bitcointalk.org/index.php?topic=5509759.0)

If banks really have a solid system to safeguard the bitcoins they’re holding, then I guess they can offer that service. As for the volatility, they could always set certain rules or policies for depositors. And we all know the banking industry, they’re heavily regulated, so with the right framework, it’s possible.

But honestly, I still wouldn’t trust banks with my bitcoin. When it comes to reserves though, if the government decides to build what they call “strategic reserves,” then they should also be prepared with proper measures to protect it. Hacks happen all the time, we’ve seen enough news to know that risk is real.

That said, in general, bitcoin will always make sense as a reserve asset since it naturally hedges against inflation.

Banks can keep Bitcoin safe if it's theirs, but if it's yours they can take advantage of the Bitcoin and bend it to their own advantage not the owners, the funny part is bank will cheat you legally, right in front of you.

They are humans and to err is human, they can be tempted to do as they see fit with your money and asset, they can take your life too even when it comes to taking over your asset or money.

Keeping my Bitcoin in the bank is like exposing all my worth to the same people that have my phone number and also my home address. These people have all the details about you and also back door to your account and assets, very dangerous if you ask me.

What is the cons of making bitcoin a reserve in the national level? I do not see any cons about it. Only what I see are pros because bitcoin is different from the fiat the countries are using because bitcoin is deflationary. Bitcoin price may fall in short period of time but it will later increase, get to all time high and still increase more.

Banks can & will custody Bitcoin for their customers. I believe legislation is well on the way to becoming a reality for people in the US. It’s only a matter of time until the majority of banks allow Bitcoin services. If mainstream adoption continues to ramp up then it’s a guarantee because banks will be missing out by not incorporating Bitcoin into their business model.

Any Bank that wants to add Bitcoin their asset, shouldn't think of stabilize the market price because they don't have such powers, Banks especially the Central Banks can do well to controlling the activities and inflation of Fiat as that is within their purview, but they cannot extend that to Bitcoin. However, the reason why banks are currently investing and holding Bitcoin is because they've seen how potential Bitcoin can be, initially a lot of them were skeptical in adopting Bitcoin, else Banks would have been the highest adoptors of Bitcoin if they had the foresight.

There are cons, maybe on the individual bank level, they have to go through long and strenuous regulatory protocols to keep Bitcoin reserves directly which is why some of them feel better to invest into the spot ETFs, since the ETFs operate on already established regulatory guidelines.

Banks reserve various assets to balance the risk. Due to volatility, they might not consider reserving Bitcoin against users' funds. But they might add Bitcoin to their own portfolio, like some other institutions that reserve Bitcoin. It does mean that from their revenue some of the part would be safely reserved. So they won't have problems even during the market dump. Because the reserve isn't against the value of the users' funds.

However, I am not against reserving Bitcoin by the bank. Just wondering about risk management during the dump. If the reserve is executed by the government directly, then it's positive for the country. Even if a dump happens, it will definitely recover and create a new high. Banks would need to develop something before reserving Bitcoin to reduce the risk.

Yeah I think that's just the significant difference between fiat and bitcoin fiat can fall in value for a long duration while the dip in the price of bitcoin does not last long, it can only last for some couple of days for example (3 to 4 days) sometimes it might not even get to this before it will start appreciating again. While the dip in fiat can last for some couple of months sometimes years before it will start appreciating again, so therefore I think is not a bad idea if the bank choose to hold bitcoin as reserve.

Those other assets or store of value are regulated but bitcoin is not yet. So banks may not be able to come in yet and especially for the volatility. To regulate liquidity in bitcoin is pivotal to volatility and to do that requires KYC. So we need not be in a haste but be ready for KYC if banks have to become a third party to customer.



They can't do any of those in isolation from the government. However, it doesn't point to the fact that the economy will be stable. Fiat isn't that volatile but the economy goes into recession and comes out of it and sometimes goes deeper in recession.

Banks already offer custody services, both in the US and in other countries. You just have to use the search engine to check it out. What I find interesting about the OP's post, which at first glance seems simple, is whether banks in different countries can hold bitcoin directly for their reserves. Many institutions cannot, and have to use bitcoin ETFs instead. It would be curious if a bank offered bitcoin trading and custody services but could not have bitcoin in its own reserves.

Bottom line is that, because of the high volatility with bitcoin, banks and government economic institutions wont consider it as a reserve considering how banks have approached bitcoin as an alternative to it existence and what we have seen, pros will definitely be higher and banks will never look at the positive side of bitcoin since their wont be able to forecast the accurate timing for the investment maturity.

Let us say the banks are the governments because the Central Banks or the world banks is a Centralized sector controlled by the governments.

So haven put you expression to fact, YES the governments usually backs it economy system of the nation with resourceful assets that are potential to hedge against inflation over the long time to conserve economy values. The federal reserves had evolved around investing or holding on foreign bonds,  global commodities and other global assets.
But as at the evolution of digital and economy financial system to Bitcoin development, adopting it for part of the reserve has become a more reliance to store values than those of the stabilized assets such as the US bonds that are negatively influenced by inflation and economy development.

Someday it will happen that most of the banks in the world have a reserve with Bitcoin. It won't just be gold of what they have in their reserve.

That is a big possibility that it's only a matter of time of when it will happen. Because the attention that's given to Bitcoin is already high and quite well enough to be recognized to be used in diversification of these establishments.

While there is no forcing that's happening for them, it's where the big money is flowing as well so they won't ignore that fact.

Banks are really the ones that will enjoy investing in Bitcoin more because of trout long term foresight they always have when it comes to investing. But can they extend that to Bitcoin which pose a rivalry to them? Actually Bitcoin was only made to be an alternative to them but not to replace them but due to wrong narratives, they’ve also missed out to have invested earlier in this assets. After carefully studying what Bitcoin encompasses, I don’t think banks will be having much issues with adoption Bitcoin and allowing not to be traded through their platforms soon.

Yeah, are banks the most well known for security? I don’t think so. Yes like in cryptocurrency we can compare scams and hacks to robberies in the bank but at least you are the one protecting your money yourself and don’t need to depend on a system you’re not familiar with at all.
They are just going to have to accept that volatility is part of bitcoin. If they are going to change so much of it then just don’t hold it in the first place.

Let me tell you things that banking systems do behind us, some of the Banks is trading with Bitcoin without the concept of their customers so for them to do that it is obvious that many of them is serving bitcoin or holding Bitcoin as investment plan in order to make a profit, but they will not make it open to the awareness of government so that they will not be sanctioned because someone of the countries government is not adopting Bitcoin in their country so that is why so many banks do not make it to open when they are holding Bitcoin as a store value to enlarge their banks

I think this is much more than a matter of maintaining de  stability account... banks are creating new paradigms on trust model to supporting this global financial system

Why? Well, look... until recently what banks doing hold? Gold, foreign currencies and government bonds, right? These are liquid assets that the entire world readily accept, so the fact that they  hold Bitcoin too means they are trust it,  they recognize the validity of the decentralized network and power of it provide.

The problem is what governments think about this... these are assets they cannot control, unlike fiat currency, bonds, interest rates, and others similar. But this is very good for small countries whit poor economy that can reduce their dependence on major powers and have reserves that arent subject to sanctions and manipulation.

Anyway... the direction is for Bitcoin to become increasingly accepted, because it already has credibility... the problem are that some governments have creating regulations to try to block its adoption.

If there are no downsides, why aren't central banks interested in adding bitcoin to their national reserves yet? The FED or ECB have even outright stated that they have no interest or intention of adding bitcoin to their national strategic reserves.

As far as I know, national reserves need to ensure criteria such as high liquidity, safety and especially stability. Because the purpose of reserves is to be used in case of economic shocks, financial crises...meanwhile, as we all know bitcoin is often dumped whenever there is instability. Clearly, bitcoin is not suitable and does not meet the criteria to become a national reserve.

In their operations, banks are subject to oversight and regulation from central banks. If central banks established a clear framework regarding Bitcoin, it is highly likely that most banks would be more open to adopting or at least facilitating Bitcoin-related services, whether in the form of custody or ETFs. However, current banking regulations on Bitcoin remain limited, as banks are not yet allowed to directly invest in Bitcoin as part of their reserves. At most, they are only permitted to facilitate Bitcoin-related services, and even then, only in certain countries, while the majority still prohibit banks from engaging with Bitcoin. But if allowed, we might see some banks would likely start small allocations to Bitcoin.

It should be noted that investing in bitcoin by institutions and companies is inherently complex and not as easy as it is for individuals, let alone banks and government agencies. Entities are subject to strict regulation and compliance by central banks and governments.

Not to mention, they have boards of directors, shareholders and all decisions must be based on consensus. No one has the authority and right to make unilateral decisions without consulting the shareholders. Therefore, there’s no such thing as banks quietly investing in bitcoin and ignoring central bank regulations.

Organizations and banks have hundreds of ways to generate huge profits from their business operations. They would not be foolish enough to risk their future by ignoring government and central bank regulations just to invest in bitcoin. Bitcoin really doesn't matter to them that much.

Which is why bitcoin is literally the most perfect thing for banks. Because they do not even have to give interest to people to keep their coins there, and if they do, it would be very small.

That means, they can loan out, and make a lot more. But that's how the trouble starts, because the world is in debt because of this.

Let's say I give 100 dollars to banks, and they promise to give me 110 back next year, that's savings and that's how they get their money right? So, what should they do? They should loan that to someone else and ask 120 back in a year, correct? Ten per month.

Instead, they give that to 9 different people, same money. Then they get 1080 back, out of my 100, pay me 110 back, and the other 970 is their profit. There are many banks and so forth that leverage this way.

This will depend on the development of bitcoin. If bitcoin remains highly volatile and cannot escape the speculative asset label, it remains subject to manipulation and is frequently dumped whenever there is instability. I don't think banks will add it to their reserves. Because what banks care about more is stability and safety, and that is why they still choose and prioritize gold over any other asset.

Also, this could happen but not anytime soon as central banks are still skeptical and wary of bitcoin. The Fed, ECB, PBOC or BOJ, the world's leading central banks have yet to express interest in bitcoin, let alone add it to their reserves in the near future.

That is true that Bitcoin is a speculative asset and it being volatile won't be considered as a good thing by the banks.

But I think that they will look at how it performed all over these years and that's going to break their standards about a stable asset.

With all of the years of Bitcoin's existence, its tremendous growth and demand could be more than enough for them to accept. Wherever the cash flow is, there go these banks will be interested too.

When I first started to pay attention to Bitcoin, it was not 100% because I wanted to "get rich". It was because I was feeling trapped by a system that measured my value in a currency I had no control over. I have seen my relatives watch their savings disappear under inflation, and I have lived with the sense that no matter how hard you work, the rules of money keep changing over your head

That is why I think the concept of banks having Bitcoin as reserves is a good thing. Bitcoin provides something that is simple, yet rare: supply predictability. A bank that is holding some Bitcoin is saying to its depositors, we understand, we know you want something tangible and untouchable as part of your savings

Sure, volatility is a problem. But I think of it as the price of getting out in front of the crowd. If more institutions were disciplined holders of Bitcoin (small allocation, long-term focus) the volatility would subside. And even if they don't, the argument is deeper than that: people deserve to know that part of their money is stored in something that cannot be diluted by some central authority

I think Xapobank in United Kingdom is doing similar thing by accepting Bitcoin deposit with other Fiat currency for savings and investments in the app, this is a first step towards bank starting to adopting Bitcoin as a store of value and making transactions the same time. The pros is giving it's users the security mindset to leverage on the opportunity of Bitcoin liquidity. The bank directors stating that rewards will be paid in BTC and may changed by in the future if there is any need.

As much as I do not like banks, but I think they have the knowledge, manpower, technology and funds to safeguard Bitcoins and those that are entrusted to them.  I think banks were not actively engaging in Bitcoin in the past years because of their government and financial institution's regulation.


Same here, I don't trust banks with my fiat currency, why should I trust them with my Bitcoin?  I hate when people control my property and, on top of that, make a profit and make me spend fees accessing my own money.


In an open market, volatility is normal since it is governed by the interaction of supply and demand.  Volatility is controlled when there is manipulation.

As a matter of fact, bitcoin doesn't need their platforms anymore to be traded, most Central banks were hostile to bitcoin activities, as they introduced so many restrictions and unnecessary monitoring of people activities, as of today we have plethora of exchanges both centralized and decentralize you could easily have your bitcoin activities without stress.

This is not as easy as you may think in theory. Banks can't decide its monetary policy in full because it always depends on the legislations from which it took its activity license, except for frw online virtual banks who has already started accepting crypto payments such as Neteller and Skrill. I don't know if in any legislation worldwide there are banks who have the ability to accept bitcoin as a value asset and add it to its reserves.

If they ignore the speculative nature of bitcoin and their own investment principles, and they are attracted to its growth and demand. Maybe they have invested in bitcoin for a long time, no need to wait any longer. But as we've seen and as I said, they're still quite skeptical about it.

Not only banks but also large corporations like Apple, Nvidia and Microsoft are still standing on the sidelines. Even these corporations are in no rush to invest in bitcoin, so I don't think banks will change their minds anytime soon.

Of course, this will not be easy but it is not impossible because after all, laws are also set by the government and central banks. They can modify, add or delete anything they want.

If bitcoin can prove its potential and meet their criteria, for example bitcoin can prove its ability to survive and overcome crises and wars. It could become more stable and ensure safety criteria like gold did. There is no reason for them to continue ignoring bitcoin if it proves those things.

I think it's only a matter of time before bitcoin becomes a bank reserve, or even a national reserve, but it won't happen as easily or as soon as many people imagine.

Now that many governments are considering seriously the creation of their own Bitcoin reserve, it wouldn't surprise me if banks did the same, although I don't think this has much to do with their business model, honestly.

About custody services for their clients, there is another problem we don't have talked about in this thread yet:

Vulnerabilities are real and attackers are becoming more and more sophisticated. If a bank is attacked and millions of dollars are robbed, they can pay their clients with (different) dollars and they wouldn't mind. But Bitcoins have a different nature, customers might not be satisfied by their price in dollars, and they are scarcer as time goes by. It would be a real mess if the amount of Bitcoin stolen were huge.

You are still in the imaginary scenario following the one created in OP. In the future, no one can tell what should happen because in a possible scenario as well we may not find banks in the same structure we see today. At least, bitcoin will be a legal tender which let individuals to use it the same way they use local currencies. At that time, banking policies wiyld change forever because the actual banking system set its policies based on centraluzation and lack of privacy which are two major factors determined by the blockchain.

Let us put it this way, every Central Bank has its own protocols and so crypto regulations may vary from country to country. Thus, we don't know exactly their regulations when it comes to crypto. But right now, we are seeing that some Banks/Central Banks owned by the government are publicly stating their stance towards btc or crypto in general. And most of them are positive on this market.

If the banks can hold Gold for long time and they didn't collapse, they can hold Bitcoin as reserve and nothing is going to happen to them. Do you know many times banks print fiat when economy isn't suitable like they predicted, the US do it once in a blue moon, and for what? It's spending. It's this printing of money that saves their ass and think Bank is a superiority, better than any other financial institutions that exist other their closed monetary policies.

If Banks so wish to buy and hold as reserved, they can do it and there wouldn't be any consequences but they wouldn't do it. You know? It's because it will be like they are given a strengthen hand to Bitcoin, it's like endorsing it as an investment like s&p500 list where potential money will come. Imagine if all the top US companies start selling their shares and buy Bitcoin, alot of people at top 100 wealthiest people will become nothing, they will go broke because their shares value is going to drop.

I what I like to imagine if bank held bitcoins is that of control. They will control who gets what and at what price. They will control it through the government. Bitcoin will be centralized and it will defeat the purpose of bitcoin. While I think some people like it because the see the bank as an institution that they can trust, this will mostly be older folks. The younger people strongly oppose it and will not support it from the onset.

The country by country accepting is the important part. If we get more and more nations accept it, then we are going to see big ones accept it as well. When it comes to big ones like USA, or Russia or China or UK, then we already achieved what we want because if those accept it, then it's okay.

I understand that smaller nations will be following those big ones so that the gap doesn't grow even further. It is not that easy, and it takes time, but it can happen and not that bad. I fear that we are not going to see this changing anytime soon, so we need those big guns to show up and accept it as reserves. Most of them are already building something like that, which means that it is going to be pretty great for all of us.

I don't understand the way some Bitcoin enthusiasts have been romancing politicians trying to make Bitcoin be their first option but what they don't know is the politicians they are seeing doesn't even control the economy, the wealthy people are the ones that control it and they don't even talk much, the politicians will only do small period of time, by the time they are done they get replaced and the circle continues while the caucus rule the economy from behind.

No matter how Bitcoin is pushed to central banks, they will not put Bitcoin first, the idea about reserve was a scam to get the attention of the people here to participate in the election, make Trump win and then change mouth. Why didn't they say they were not going to use tax payers money to buy Bitcoin from the beginning, now that they are in office, they are now killing the promises they made to the public, bunch of liars playing on Bitcoin community.

Which banks you are referring to? Are they crypto friendly while the global system doesn't recognize crypto yet? Except for few countries maybe like UAE and El Salvador where crypto is somehow legally recognized, i can't mention any other bank in any other country. Maybe you consider PayPal a bank but it isn't, and PP manage crypto deposits but not making crypto a strategic reserve.

What bank does is that they look for a responsible way that will lead them into success and anything that will give them profit in banking system they always make sure that they achieve it, why Banks currently is investing in Bitcoin, is because they want what that will give them profit and they want something that will multiply what they really have so it is the essence of bank going into gold investment and also in cryptocurrency investment especially Bitcoin investment recently

It's obvious that the crypto sector is one place that is attracting alot of attention especially from financial institutions because it's one place that has proven to be a good prospect for a business especially when it comes to investments, and that is one key areas that banks too has interest in so it will be a good one for us to see financial institutions like banks investing in Bitcoin but the problem has been that alot of financial institutions is afraid that Bitcoin is a threat to the stability of the banking sector.