Big decision by the OCC - Banks can now hodl Bitcoins.

[Juggy777]

The Office of the Comptroller of the Currency (USA) has allowed banks to hodl bitcoins on behalf of their clients, and this is a big news because banks will now be able to offer crypto related service’s for their clients. However I’m skeptical of this news too because banks may charge higher fees, and try and profit from each and every transaction their clients make. Lastly what do you’ll think of this move, will it actually help bitcoins in the long run or not?.

Big banks have long held precious objects on behalf of their customers—from jewels in safe-deposit boxes to shares of stock. Now, thanks to a new policy by a federal banking regulator, they will be able to hold cryptocurrencies like Bitcoin too.

The new policy is set out in a letter published on Wednesday by the Office of the Comptroller of the Currency (OCC). The letter, addressed to an unnamed bank, stated that national banks and savings associations can engage in so-called custody services for their clients.

The news is significant because regulatory uncertainty has until now led major banks to avoid Bitcoin.

Source:

https://fortune.com/2020/07/22/bitcoin-big-banks-can-hold-occ-letter/

[meanwords]

From what I can see from this, this will surely help with the adoption and should be able to help in reaching to other investors for Bitcoin but the downside is that there will be no privacy as for sure the bank will try to ask for identifications and documents. Also, people will not own that Bitcoin as of course the bank will have the private key to it. Maybe the bank will give the key to the user when we ask? I don't know.

[avikz]

There are two parts of the story. One is good and another one is bad. Let me explain in details,

The good part:
1. Crypto will become mainstream with banks offering crypto services.
2. Stores and merchants will be interested in accepting cryptos as a medium of exchange
3. Increase in credibility of cryptos
4. Chance of indemnity in case of a hack

The bad part:
1. The banks will have information about your crypto holding and your KYC data
2. Your crypto holdings will be reported to IRS periodically
3. Banks will control your crypto holding so you will essentially loose the control over your own money that you used to enjoy earlier with your own private key
4. Nothing you can hide from the government if you opt for crypto banking service.

So choose wisely before you cheer about it!

[Lucius]

Since the beginning of this year, such a law has allowed some German banks to get involved in the crypto business. It seems that such business practices will become common in all countries where banks will be able to fight for such laws, because it is in their interest to make a profit, and obviously they see the potential for their earnings in crypto.

As pointed out in previous posts, this has its pros and cons - because surely more people will be interested in investing in Bitcoin if they are allowed to do so through banks - but on the other hand it is not right for banks to control something that should be decentralized. However, I believe that many are mostly focused only on the price, and that they are not very interested in other aspects - time will tell whether banks will become serious players and whether they will take part of the cake from the crypto exchanges.

[Kakmakr]

This is not a good decision for customers, if they want to go that route..

Banks have show in the past that not even your safe deposit boxes are safe and untouchable (Example : https://www.qwealthreport.com/safe-deposit-raids-governments-out-of-control/

Did you know this? ---> https://pivotalperformanceprocesses.com/government-raided-safe-deposit-boxes-1930-gold-confiscation/ and I quote, "The Government Raided Safe-Deposit Boxes to Confiscate Gold During the 1930s."

So what do you think will happen to bitcoins that are stored at centralized Banks, if a corrupt government wants to seize it? The Gold seized was in the US, not some 3rd world country.  

[Charles-Tim]

The Office of the Comptroller of the Currency (USA) has allowed banks to hodl bitcoins on behalf of their clients

This is great because it will help bitcoin adoption, most people are novice and know nothing about bitcoin but to only hodl, this will be an advantage to governmental bitcoin control. But, bitcoin is decentralized, we can hodl our bitcoin ourselves which makes us to have full control of our bitcoin on blockchain rather than banks doing such for us. But I know many people will prefer banks to do that for them because they know nothing about bitcoin, this will truly help bitcoin adoption but could be the dawning of bitcoin taxation policies and bitcoin indirectly becoming centralized.

[mk4]

This is not a good decision for customers, if they want to go that route..

Banks have show in the past that not even your safe deposit boxes are safe and untouchable (Example : https://www.qwealthreport.com/safe-deposit-raids-governments-out-of-control/

Did you know this? ---> https://pivotalperformanceprocesses.com/government-raided-safe-deposit-boxes-1930-gold-confiscation/ and I quote, "The Government Raided Safe-Deposit Boxes to Confiscate Gold During the 1930s."

So what do you think will happen to bitcoins that are stored at centralized Banks, if a corrupt government wants to seize it? The Gold seized was in the US, not some 3rd world country.  

Though I'm definitely not advocating for this and I'm definitely not saying that we should trust the banks to hold our keys, not sure why you would compare something they're storing physically, to something digital though. Unless they're going to store the coins through physical paper wallets LOL.

[stompix]

So reading through, the first steps that banks might take will be

- offering custodial services
- staking..lol
- crypto lending

Well, of all they could do with cryptos those are the ones I'm not really keen on it.
Not going to store my coins in a bank for sure and crypto lending is again not the thing I would choose to get involved in right now.

But, it's a step forward, I would really love to see them offering bank account in BTC, so companies could start offering BTC payments directly with their bank and not going through all the trouble of having a third payment processor on top of their bank account. I doubt that would come too soon but who knows, stranger things have happened 

Though I'm definitely not advocating for this and I'm definitely not saying that we should trust the banks to hold our keys, not sure why you would compare something they're storing physically, to something digital though. Unless they're going to store the coins through physical paper wallets LOL.

What would be the difference between seizing a box and a server or a laptop? The keys might be digital but that information containing them is stored on something physical.

[The Cryptovator]

I am wondering, why should I store my bitcoin to the banks? Am I not my own bank? Just assume it would keep role bitcoin adoption, but besides that, it would freeze your bitcoin as well. And obviously, the most disadvantage is you are exposing yourself as a bitcoin user. Perhaps buy-sell via bank is something positive in my opinion. But storing my bitcoin there isn't a wise decision. Even I am not encouraged to get loans or staking my bitcoin with the bank. Maintenance fees would be high as well. I am pretty sure any big holders will not store their bitcoin into the bank. But overall it's a positive move for bitcoin adoption.

[davis196]

I am wondering, why should I store my bitcoin to the banks? Am I not my own bank? Just assume it would keep role bitcoin adoption, but besides that, it would freeze your bitcoin as well. And obviously, the most disadvantage is you are exposing yourself as a bitcoin user. Perhaps buy-sell via bank is something positive in my opinion. But storing my bitcoin there isn't a wise decision. Even I am not encouraged to get loans or staking my bitcoin with the bank. Maintenance fees would be high as well. I am pretty sure any big holders will not store their bitcoin into the bank. But overall it's a positive move for bitcoin adoption.

Yeah,storing Bitcoins in a bank,instead in your own BTC wallet,doesn't make any sense.You will pay additional fees and get the same level of security,maybe even lower.
This decision acknowledges Bitcoin as a valuable asset/possession,but nothing more.It won't help boosting the adoption of Bitcoin,by making buying and storing Bitcoin cheaper and more convenient.
It will only create another income stream for the banks(if there are people,who are ignorant enough to give their Bitcoins to a bank).

[DdmrDdmr]

<…> storing Bitcoins in a bank,instead in your own BTC wallet,doesn't make any sense.You will pay additional fees and get the same level of security,maybe even lower. <…>

From many investor’s perspective, it does make sense. From most forum member’s perspective, it doesn’t. People here on the Forum are used to "being their own bank" to a certain degree, and more or less understand what it entails in terms of wallets, security and ownership.

Nevertheless, there are many investors out there that would probably ponder investing some amount in Bitcoin, without having to go on to understanding a bunch of technicalities that are behind being their own bank, and beyond their comprehension. They are used to having the bank being their custodial, and would accept a similar solution to their Bitcoin custody. The fineprint here would be paramount to read and understand, in order to get to know the bank’s degree of liable responsibility and guarantees.

It’s not my piece of cake, but I get why it can be that of others with different backgrounds and investment habits.

[ethereumhunter]

As you say, the banks will charge high fees for their members with a large amount of bitcoin. Besides that, I think the bank will need the members to fills another document, just in case if the member is not related to money laundering. However, I prefer to hold my bitcoin on my own wallet because I don't want to see the other party services manage my bitcoin. They will become suspicious of me, and I think they will investigate me to know more about how I can make more bitcoin.

[yazher]

Let me just clarify one thing here, the banks are allowing their clients to hold some BTC on their accounts with the bank? Well, this is not usually as we know banks are not crypto-friendly but what is exactly going on here man? I don't know if it is good or not cause this not what I am expecting for the banks. guess things has changed now and they will have some planned with cryptocurrencies. The only problem here is how they will handle the volatility of the price do they have some plans on the unknown movement of the price in the crypto market?

[mk4]

What would be the difference between seizing a box and a server or a laptop? The keys might be digital but that information containing them is stored on something physical.

Because having access to the device doesn't automatically mean that the thief would also have access to the device's contents; just as if someone stole my encrypted Linux device, the thief wouldn't have access to my files unless the thief has a device powerful enough to crack the encryption.

But then again, this is assuming that the banks would do at the very least a decent job with their opsec.

Also, I don't think comparing a customer's storage box to a bank's servers is a fair comparison either. Of course the bank's infrastructure would be vastly more secure, simply because they are far far more incentivized in keeping it secure.

From many investor’s perspective, it does make sense. From most forum member’s perspective, it doesn’t. People here on the Forum are used to "being their own bank" to a certain degree, and more or less understand what it entails in terms of wallets, security and ownership.

Finally somebody gets it. Let's not forget that there are technologically-illiterate people out there too.

[teosanru]

The Office of the Comptroller of the Currency (USA) has allowed banks to hodl bitcoins on behalf of their clients, and this is a big news because banks will now be able to offer crypto related service’s for their clients. However I’m skeptical of this news too because banks may charge higher fees, and try and profit from each and every transaction their clients make. Lastly what do you’ll think of this move, will it actually help bitcoins in the long run or not?.

Big banks have long held precious objects on behalf of their customers—from jewels in safe-deposit boxes to shares of stock. Now, thanks to a new policy by a federal banking regulator, they will be able to hold cryptocurrencies like Bitcoin too.

The new policy is set out in a letter published on Wednesday by the Office of the Comptroller of the Currency (OCC). The letter, addressed to an unnamed bank, stated that national banks and savings associations can engage in so-called custody services for their clients.

The news is significant because regulatory uncertainty has until now led major banks to avoid Bitcoin.

Source:

https://fortune.com/2020/07/22/bitcoin-big-banks-can-hold-occ-letter/

Wait a second what exactly do you mean by this? Do you mean that i can write my private key on a piece of paper and keep it in the safe box of a bank because that was pretty much legal always. Or do you mean that bank will control my bitcoin and I have to give them the private key or transfer them possession. Because the later seems pretty scary to me. What is the point of having a bitcoin when you are going to safeguard it by a bank. Lol isn't the ironical? Or is it only me who found some irony in this?

[stompix]

~

Because having access to the device doesn't automatically mean that the thief would also have access to the device's contents; just as if someone stole my encrypted Linux device, the thief wouldn't have access to my files unless the thief has a device powerful enough to crack the encryption.

Nope, because the thief is stealing only your device, the government comes and seizes everything!
And I would really want to see the banks not handling all the information to the government if they did decide to do that, do you? Or do you think the bank CEO has the encryption phrase in his pocket and he will swallow it once the feds storm the building?   Besides, it will fall into asset forfeiture, and not disclosing or trying to prevent the authorities from touching it will end in a criminal charge.

The only problem here is how they will handle the volatility of the price do they have some plans on the unknown movement of the price in the crypto market?

What volatility? You store 1 BTC you have one BTC!
Just like you store a golden ring, it doesn't matter what the gold price is.

[mk4]

Nope, because the thief is stealing only your device, the government comes and seizes everything!
And I would really want to see the banks not handling all the information to the government if they did decide to do that, do you? Or do you think the bank CEO has the encryption phrase in his pocket and he will swallow it once the feds storm the building?   Besides, it will fall into asset forfeiture, and not disclosing or trying to prevent the authorities from touching it will end in a criminal charge.

Of course I don't want it either, hence I hold my coins in self-custody. But then again, there are A LOT of other people out there outside our tech-savvy cryptocurrency bubble group that might want to take advantage of bitcoin's market characteristics(not necessarily the privacy and sovereignty characteristics).

The point here is freedom of choice. If they want to go let the banks hold their bitcoin knowing the risks, then let them. Doesn't mean that we also should follow suit.

[Darker45]

While this is neither good nor bad news to me personally, many people might actually welcome this development. After all, we are all aware that not everyone getting into Bitcoin is doing so for the sake of the philosophy it espouses.

Many of us here may think this is somehow funny or very ironic but then a lot of people are admittedly a failure in keeping valuables. And that might include a significant Bitcoin holding.

A lot are hodling Bitcoin for the sake of investment or for storing value. Most of these people probably don't mind divulging certain personal information or if the banks or the government is able to know their worth.

This is especially for all those who cannot function as individual banks.

[joniboini]

Wonder what's the real motive behind this. To increase their surveillance over individual wealth? Hmm. I won't use this nor support people to do this, you could hold bitcoin on your own wallet and cash out without giving stuff like KYC. Why do I feel that banks are gonna compete with exchanges now.

[NotATether]

The good part:
4. Chance of indemnity in case of a hack

I think banks bearing the losses of hacks will be bad for us in the long run. Top banks are classified as "too big to fail" companies which means if they ever get insolvent the government injects a lot of cash in them which is bad for the whole economy because this inflates the dollar. Given that hacks stealing tens or hundreds of millions worth of BTC are common this will inject money in them faster.