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June 20, 2014, 05:08:59 AM Last edit: June 20, 2014, 08:18:13 PM by Kluge |
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It's a massive undertaking... I doubt any major banks will get on board before the government has strict guidelines (rather, the government will likely force them to stop after starting until they sort it out). US cyber-security, even from banks, isn't up to snuff for handling BTC, and there doesn't appear to be an effective federal office for solving that problem (mandating minimum standards, online security and financial audits, punishment declarations and enforcement). The USG still hasn't fully criminalized negligent security practices, so I really don't see this happening any time soon, and it may not be good if it does happen "too soon." A major bank losing large sums of BTC early on would be devastating, and there obviously isn't a proper insurance agency in place, yet. Auditing's been kinda-sorta figured out, but it's not clear (to my ignorant self) BTC offers any transparency advantage there from the auditors' perspective since assets & liabilities can still be misclassified, unintentionally or otherwise.
Should BTC survive as long, I don't see "this" (allowing BTC-denom bank accounts, with tied debit cards and checks) happening for at least a decade. OTOH, there're probably a few boat-loads of money to be made acting as a currency exchange, which they're probably fully licensed for already since global banks usually offer currency conversion services (with high [~3%] fees, though this is competitive with some ATMs). If they should also branch into payment processing, and I have no idea why they wouldn't, there's a fair chance it could kill off all our "grassroots businesses" in those spaces, too - so BitPay, BIPS, etc. OTOH, those "grassroots businesses" may also be able to outcompete the banks' bloated overhead accumulated over many years and necessarily(?) high fees, and the longer banks wait, the more trust "our" companies can build up and establish themselves to negate those advantages from these centuries-old institutions, and then I suppose it's mostly just a matter of who's properly insured and has the best recent history on security and privacy.
Going a bit more off on a tangent - I'm not sure an effective large-scale insurance agency could even be created for BTC. Right now, if the SHTF with banks, the government can just print away the losses for the FDIC/NCUA and effectively give everyone a haircut. It's iffy insurance, but you still get something back in case a bank or CU fails, probably the full nominal value unless you're super-rich - and it's perhaps easier to assess the risk for insurance agencies with the conventional system, too. After all, we've been monitoring and securing physical money for thousands of years -- digital currency is relatively unexplored territory. Anyway, what does the government do if "domestic terrorists" or whatever successfully attack multiple major banks at once and BTC1m is stolen? You can't print that loss away, and keeping in mind the astronomical value of BTC if we come to this stage, does the USG declare "war" on the perpetrator? Will the banks employ devs like TBF does, and run their own miners, and will banks still be footmen of the USG (and other superpowers)?
In case I haven't spewed enough unrelated speculative arguments and questions -- I wonder if insured banks will promote BTC deposits simply by noting that BTC must be purchased by insurance companies to cover potential losses. It's like hodling on steroids since the FDIC/NCUA/whatever hodls a % of what you hodl in the bank!
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