Crypto Bank

[adamcro]

I was thinking about it for a while. I am a developer, I understand the concept of bitcoin, blockchain and decentralization. There are cryptocurrency buying services, there are wallet creation services. People who want to have cryptocurrency already have and know what they need to use from the service.

But even though blockchain and crypto are designed to be decentralized, in a way I believe that the bank will then slowly switch to crypto and offer you a service, so your bank will make you an account, keep the currency there, you will use the payment card... basically manage everything as they do now. As it is now with fiat. Since a large part of the market people is crypto-uneducated this will be a good opportunity for banks to gain market share.

What interests me is that it makes sense to start a “bank” that will take care of customers like traditional banks do. Opening an account, buying a crypt, maintaining a computer, etc.?

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[NeuroticFish]

What interests me is that it makes sense to start a “bank” that will take care of customers like traditional banks do. Opening an account, buying a crypt, maintaining a computer, etc.?

For the bank it makes sense. It can even use cypto as a fractional reserve asset, since many customers may just deposit there for long time.

For the crypto user - it depends on the user. Many don't care about "not your keys, not your coins" and if a small APY is offered some will be happy.
Many other users will be outraged, since crypto is meant to avoid third party. Many will prefer to remain anonymous and will keep their coins on their own wallet.
So, it depends on the user.

But.. in order to do this "you" have to
1. Get to get trusted. Big time. No sane person deposits money just like that.
2. "You" have to have all the credentials of a financial institution, accepted in all the countries this service is offered in. Basically "you" have to be a bank with some extra competences.
3. "You" have to ask for KYC from users, which will most probably scare off a big number of the potential customers.

Nowadays banks started making deals with crypto exchanges so they, together, can offer something pretty much close to what you are saying.

[hugeblack]

I do not think you know the definition of decentralization, the goal of cryptocurrencies is to eliminate the middleman, which is a trusted third party (the bank) that updates the accounts of the sender and receiver.

A Peer-to-Peer Electronic Cash System - Bitcoin.org

The best thing that could happen is to have central networks that act as gateways between cryptocurrencies and traditional payment methods such as MasterCard or Visa.

As for the role of banks, it will be a mechanism for exchanging and converting Bitcoin into paper money (if all cryptos are successful) or providing loans and the rest of the central financing services.

The problem with the banks is always that they want to keep the money and then start financing with more than the assets deposited with them.

[sheenshane]

What interests me is that it makes sense to start a “bank” that will take care of customers like traditional banks do. Opening an account, buying a crypt, maintaining a computer, etc.?

Bank used traditional money which is highly regulated by the government, it's I think it is irrelevant if the bank accepts Bitcoin which is unregulated because of its decentralized nature.  If you want the same services offered like a bank which is also centralized and purely accepts crypto, we have a lot of custodial wallets/exchanges that are regulated with governments too (depending on which country you are) which means, there's KYC compliance.

If you're a developer that related to crypto which is I have doubt that you understand decentralized, just be your own bank, have your own non-custodial wallet, and don't forget the golden rule of cryptocurrency.   "Not your key, not your coin ", so I think bank services aren't needed if you're in crypto especially in Bitcoin.

[Lucius]

What interests me is that it makes sense to start a “bank” that will take care of customers like traditional banks do. Opening an account, buying a crypt, maintaining a computer, etc.?

What you are describing is what is available today through crypto exchanges, which do not differ too much from traditional banks. Some of these companies even offer interest on deposits, and it should be mentioned that some of these companies have been in this business for many years, and that they have experience with secure storage. I'm not sure how safe traditional banks would be in that sense, because if someone hacked such a crypto bank and stole say 100 million in BTC - it's not the same as if someone stole $100 million from the same bank.

With all of that, it would be for many the complete opposite of what Bitcoin should offer everyone, and that is for everyone to be their own bank. I am personally against such an idea and I would never use something like that.

[sunsilk]

The chance that the banks will allow and add a crypto service on what they traditionally offering to the people is very low.

What interests me is that it makes sense to start a “bank” that will take care of customers like traditional banks do. Opening an account, buying a crypt, maintaining a computer, etc.?

That's an all around service. Maintaining a computer isn't really necessary unless you work for a corporation and if you think of doing something like being the bank for crypto services. This is only good for the starters and that's the target market you're going to have.

Because making a crypto wallet is just easy as it goes.

[nullama]

This is basically what the banks, and companies like PayPal, are starting to do right now.

They are starting to offer their clients the ability to exchange their fiat for Bitcoin, held in their own system.

They're promising ease of use, but the problem is that you cannot withdraw those bitcoins into your own wallet.

In that way, banks are trying to keep relevant, because in reality you don't need the banks to hold your own bitcoin, you can just keep it in your own wallet.

Bitcoin doesn't need banks, banks need Bitcoin to keep themselves relevant.

[bL4nkcode]

This is basically what the banks, and companies like PayPal, are starting to do right now.

They are starting to offer their clients the ability to exchange their fiat for Bitcoin, held in their own system.

They're promising ease of use, but the problem is that you cannot withdraw those bitcoins into your own wallet.

In that way, banks are trying to keep relevant, because in reality you don't need the banks to hold your own bitcoin, you can just keep it in your own wallet.

Bitcoin doesn't need banks, banks need Bitcoin to keep themselves relevant.

Some offering to buy bitcoin on the bank/platform but in reality they don't have bitcoin to be sold to their clients, since bitcoin cannot be sent by the one or not available yet to withdraw/send is probably the biggest lie they made just to keep being relevant.

[toast]

There are more and more banks that accept Crypto. Unfortunately, there are also more and more banks that ask a lot of questions about how you got the crypto. Not really nice to be a customer like that. I know I have such a bank in Germany, but I forgot the name. And the limits are decent too.

[uneng]

There are some crypto virtual banks operating borderless already and from times to times more of them are being created, what is pretty good because this way we have a healthy and decentralized competition among services of this same kind, aiming to offer the best possible services to their users. So customers have access to competitive interest rates and promotions when investing their crypto funds. Compared to traditional fiat banks I think it's much better already, as every services you need from a traditional bank you can also find at a crypto one, including credit cards with pretty decent cashback rates, depending your investment size at the platform, accordingly to its internal requirements.

[JooBra]

There are some crypto virtual banks operating borderless already and from times to times more of them are being created, what is pretty good because this way we have a healthy and decentralized competition among services of this same kind, aiming to offer the best possible services to their users. So customers have access to competitive interest rates and promotions when investing their crypto funds. Compared to traditional fiat banks I think it's much better already, as every services you need from a traditional bank you can also find at a crypto one, including credit cards with pretty decent cashback rates, depending your investment size at the platform, accordingly to its internal requirements.

I keep 90% of my money in crypto and when I need fiat I use crypterium card to transfer my crypto to card. Maybe fees are a bit higher then the cards from banks but still all transaction are done instantly and that is one of big good things from crypto in general.

[amishmanish]

I keep 90% of my money in crypto and when I need fiat I use crypterium card to transfer my crypto to card. Maybe fees are a bit higher then the cards from banks but still all transaction are done instantly and that is one of big good things from crypto in general.

Wow. Thats pretty bold of you and pioneering that you use a crypto payment card for such a big part of your expenses.

The ideas and implementation of crypto-banks in various forms has been around for quite sometime. Even today you can deposit "crypto assets" into protocols like AAVE, COMP and borrow loans against the collateral. To be fair, its only collateral if the "tokens" you keep as collateral are something you have earned or seem to have because you were early. For example, it doesn't make sense if you buy 200 USD of BAT and then loan it to COMP for 100 dollars of debt. Still, this does open up certain opportunities.

If you can use that 100 dollar and invest somewhere else it'll multiply, then you can play the game. All this while, your collateral will stay safe as long as the underlying tokens doesn't fall a lot in value. It essentially allows you to take risk using existing capital. The biggest drawback is that the rich get richer.

A purely crypto bank would probably function like any other bank. What changes things is application to other areas apart from banking. Just starting a bank based on crypto is the same as operating banks with electronic wire transfers.

[uneng]

There are some crypto virtual banks operating borderless already and from times to times more of them are being created, what is pretty good because this way we have a healthy and decentralized competition among services of this same kind, aiming to offer the best possible services to their users. So customers have access to competitive interest rates and promotions when investing their crypto funds. Compared to traditional fiat banks I think it's much better already, as every services you need from a traditional bank you can also find at a crypto one, including credit cards with pretty decent cashback rates, depending your investment size at the platform, accordingly to its internal requirements.

I keep 90% of my money in crypto and when I need fiat I use crypterium card to transfer my crypto to card. Maybe fees are a bit higher then the cards from banks but still all transaction are done instantly and that is one of big good things from crypto in general.

Very nice. I use an app called Alter (formerly AlterBank) which is unfortunatelly exclusive for my country as far as I know. They give a free credit card (although the money is instantly debited from the account) without any kind of fees, plus cashback of 0,5% on every purchases. Users can make deposits in fiat or bitcoin on their accounts and exchange it from one currency to another internally.

So just like you, I follow a similar financial strategy keeping a high percentage of my funds in bitcoin... Every month I exchange the necessary amount of money from btc to fiat for monthly expenses using this app, in order to use the credit card. We are putting high expectations on bitcoin, hum?

I wasn't aware about Crypterium yet. I will take a look on this later, thank you!

[ReginaR]

Crypto banking simply refers to the managing of digital currency at any financial service or banking provider. It's becoming widely popular because anyone with an internet connection can buy, sell and trade cryptocurrencies. crypto bank would probably function like any other bank. What changes things is application to other areas apart from banking. Just starting a bank based on crypto is the same as operating banks with electronic wire transfers.keep the currency there, you will use the payment card... basically manage everything as they do now. As it is now with fiat. Since a large part of the market people is crypto-uneducated this will be a good opportunity for banks to gain market share.

[Oilacris]

Crypto banking simply refers to the managing of digital currency at any financial service or banking provider. It's becoming widely popular because anyone with an internet connection can buy, sell and trade cryptocurrencies. crypto bank would probably function like any other bank. What changes things is application to other areas apart from banking. Just starting a bank based on crypto is the same as operating banks with electronic wire transfers.keep the currency there, you will use the payment card... basically manage everything as they do now. As it is now with fiat. Since a large part of the market people is crypto-uneducated this will be a good opportunity for banks to gain market share.

We do have already fiat banks and we dont need banks which are holding still our crypto assets on which means that it is ironically removing the essence of decentralization unless if you are already

deciding to make out some conversion then these institutions would really be that something relevant but in overall saying or aspect then i dont see any relavance
or needed on such service yet we do already have local wallets and exchanges which would do the job.

[Taskford]

Crypto banking simply refers to the managing of digital currency at any financial service or banking provider. It's becoming widely popular because anyone with an internet connection can buy, sell and trade cryptocurrencies. crypto bank would probably function like any other bank. What changes things is application to other areas apart from banking. Just starting a bank based on crypto is the same as operating banks with electronic wire transfers.keep the currency there, you will use the payment card... basically manage everything as they do now. As it is now with fiat. Since a large part of the market people is crypto-uneducated this will be a good opportunity for banks to gain market share.

We do have already fiat banks and we dont need banks which are holding still our crypto assets on which means that it is ironically removing the essence of decentralization unless if you are already

deciding to make out some conversion then these institutions would really be that something relevant but in overall saying or aspect then i dont see any relavance
or needed on such service yet we do already have local wallets and exchanges which would do the job.

But in some other scenarios once bitcoin will fully adopted we cannot erase the possibilities that financial institutions like banks will accept bitcoin transactions especially storing it for long time or whatever you like to use it.

Its really defeating the purpose but I believe the regulation of government will possibly include that since for sure they adjust on those changes and try ro earn with those people who legally use bitcoin.

[Danydee]

 My personal thinking is that banks are surely having an eye on this and already studying the subject (for some of them).

 So naturally what they can do and also what's they can take profit from is providing all diverse and global cryptocurrencies prestations, what will facilitate many things for crypto holders..  And that will not be necessary a bad thing, in way it can give a considerable boost to use and adoption of cryptocurrencies !

The problem with the banks is always that they want to keep the money and then start financing with more than the assets deposited with them.

This is a thing related to regulations, so there is such rules that allows banks to edit/give more assets than they have in the volt/reserve.  multiple times, up to 10 !

 So the case with cryptocurrencies can be the same I think as they can just edit money in the equivalent value of the cryptos deposited!

[JooBra]

My personal thinking is that banks are surely having an eye on this and already studying the subject (for some of them).

 So naturally what they can do and also what's they can take profit from is providing all diverse and global cryptocurrencies prestations, what will facilitate many things for crypto holders..  And that will not be necessary a bad thing, in way it can give a considerable boost to use and adoption of cryptocurrencies !

The problem with the banks is always that they want to keep the money and then start financing with more than the assets deposited with them.

This is a thing related to regulations, so there is such rules that allows banks to edit/give more assets than they have in the volt/reserve.  multiple times, up to 10 !

 So the case with cryptocurrencies can be the same I think as they can just edit money in the equivalent value of the cryptos deposited!

The idea is good but I think we are long away from getting it done. Bank are still stuck like 20years ago. It's sad but true.

[zaesvlas]

I think that in the future this service may well be interesting, because now people call it a "wallet". It is possible that in the future the bank will be quite a convenient tool.

[Agbe]

It is a very good idea but if you create Crypto bank where Crypto Currencies will be controlled and regulated, plenty people will be victimized by the same bank as the way they are doing in the fiat Banks. Bank workers will be defrauding and Scamming people from divert ways. There will be device maintenances, customer care services fees etc. Satoshi knew all these things that is why he kept the system decentralized. So that nobody can control, regulate, view another person withdraw, and deposit.
Therefore, I strongly disagree with the idea or the suggestion of developing Crypto Bank. Because Authorities will use this medium to control and regulate the Currencies to their favour or probably kill the currency. The wallet system is still preferable. Banks are not trusted to handle Crypto Currencies. Instead there should be instant exchange of bitcoin to fiat currencies in the whole world for all individual without stress. The process of changing bitcoin to fiat is too Cumbersome for now.

[Blank-Head]

Crypto bank is a very common thing now. Whenever we talk about cryptocurrency, we think of this crypto bank. This is going to be a very interesting and widely used medium I think it will go in a much better position up front.

[mindrust]

What interests me is that it makes sense to start a “bank” that will take care of customers like traditional banks do. Opening an account, buying a crypt, maintaining a computer, etc.?

Crypto exchanges already do that. It is nothing new. If you want to operate a crypto exchange you can do it now. Nobody is stopping you. It is not going to be cheap however. Possibly hundreds of thousands of dollars you will need to get on your feet and it might suck another few hundred k's just so you can stay on you feet. That's because there is a wild competition between the exchanges already.

Why would anybody choose you over Binance, Coinbase, Kucoin and other big exchanges?

You'll have to spend crazy amounts on promotions/ads. I'd say give up.

[Taskford]

If institutional bankers will make this idea into reality and give decent percentage return per anum then most provably I will tryst them because we know they are trusted since they are been regulated by the law. But if random people will create this and they are just known online well maybe I doubt I will use their service because scamming is not new on crypto and might they used that if this idea became successful.

[zaesvlas]

If institutional bankers will make this idea into reality and give decent percentage return per anum then most provably I will tryst them because we know they are trusted since they are been regulated by the law. But if random people will create this and they are just known online well maybe I doubt I will use their service because scamming is not new on crypto and might they used that if this idea became successful.

What then is the profit of the bank? What will he pay interest to users for?

[Erdogan]

I was thinking about it for a while. I am a developer, I understand the concept of bitcoin, blockchain and decentralization. There are cryptocurrency buying services, there are wallet creation services. People who want to have cryptocurrency already have and know what they need to use from the service.

But even though blockchain and crypto are designed to be decentralized, in a way I believe that the bank will then slowly switch to crypto and offer you a service, so your bank will make you an account, keep the currency there, you will use the payment card... basically manage everything as they do now. As it is now with fiat. Since a large part of the market people is crypto-uneducated this will be a good opportunity for banks to gain market share.

What interests me is that it makes sense to start a “bank” that will take care of customers like traditional banks do. Opening an account, buying a crypt, maintaining a computer, etc.?

I think that this type of service / product will appear on the market sooner or later. However, I don't think it will be what you think. I think it is simply the bank that will create the electronic form of fiat money. In fact, there is already a lot of talk about it and I think that this type of money will come into use within a few years. Of course, someone new to the market will have a big problem to compete with existing banks, because I am convinced that they are already preparing for it and already have a customer base and operate in accordance with all regulations. Someone new without a lot of capital simply will not survive.

[amishmanish]

Bank is basically a custodian of our money. It offers services which suits it. For most people bank is a good entity. But the concept of bitcoin was to bypass the traditional banking in personal peer to peer transactions. However with increasing numbers and sophistication of scams, I think people will start using banks as custodian to their crypto lust like it do for their fiat.
So In a way yes we might see crypto bank in a year or two

[Crypto Library]

I don't really think that any crypto user like this Banking system . Because the main purpose of crypto currency is avoid those things . Crypto users are the only owner of her wallet  no outside has authority here. But can start like  a centralised exchanger which give consumer nice APY rate.

[goldenmonke]

What interests me is that it makes sense to start a “bank” that will take care of customers like traditional banks do. Opening an account, buying a crypt, maintaining a computer, etc.?

It does not make sense to have a 'crypto bank.'

A bank's core function is to maintain a ledger (a list of who owns what value). BTC is a ledger that was designed to replace this core functionality. In other words: BTC is already a bank.

[Blackie@5]

It's will be a thing of joy for most people that the banks now works in a way of crypto but looking at it other other hand cryptocurrency is something that deals with private keys and it's shouldn't involved third parties, is just you and your wallet, so how would people cope with such a lifestyle exposing their keys to the banks despite their will KYC  involved

So for me I prefer it should be just me and my phase then third party

[CryptoManiac017]

Local banks may not be able to work with this fully because the concept of the Blockchain technology for the crypto space is to be decentralized thereby not letting room for the regulations of the crypto market a d aswell as it's transactions and the local banks are usually regulated and aswell been sanctioned in cases where their transactions and activities fail to stay under the regulations of the government policies about how financial activities should be done in such country or state. An online crypto bank can be created that will still abide under the decentralized system of operation in other to avoid hitches since they will be operating crypto aswell so it will be beyond the regular local banking system it will be such a good innovation amongst crypto enthusiast.

[oktana]

What interests me is that it makes sense to start a “bank” that will take care of customers like traditional banks do. Opening an account, buying a crypt, maintaining a computer, etc.?

For the bank it makes sense. It can even use cypto as a fractional reserve asset, since many customers may just deposit there for long time.

For the crypto user - it depends on the user. Many don't care about "not your keys, not your coins" and if a small APY is offered some will be happy.
Many other users will be outraged, since crypto is meant to avoid third party. Many will prefer to remain anonymous and will keep their coins on their own wallet.
So, it depends on the user.

But.. in order to do this "you" have to
1. Get to get trusted. Big time. No sane person deposits money just like that.
2. "You" have to have all the credentials of a financial institution, accepted in all the countries this service is offered in. Basically "you" have to be a bank with some extra competences.
3. "You" have to ask for KYC from users, which will most probably scare off a big number of the potential customers.

Nowadays banks started making deals with crypto exchanges so they, together, can offer something pretty much close to what you are saying.

The third point here is just about the main deal. This is because asking KYC in cryptocurrency related business is weird. We should have that feature of privacy that no one knows any of your information. Having to WILLINGLY submit KYC and even many more information is not something that I’d do. KYC scares so many people because of various reasons, which also includes data theft. 

[uneng]

3. "You" have to ask for KYC from users, which will most probably scare off a big number of the potential customers.

The third point here is just about the main deal. This is because asking KYC in cryptocurrency related business is weird. We should have that feature of privacy that no one knows any of your information. Having to WILLINGLY submit KYC and even many more information is not something that I’d do. KYC scares so many people because of various reasons, which also includes data theft. 

It's so common for crypto businesses to enforce KYC procedure nowadays. It was weird in the early years of this industry, although now it's already pretty usual, being weird for a business to not demand personal informations from users in order to let them use the platform's services these days. If you want to cashout crypto to fiat right now, you probably have to give your personal ID to an exchange at some point, otherwise how are you going to cashout your profits from crypto investments?

Even if you do P2P transactions, the person on the other side of the transaction will have access to your bank account's informations. Privacy is an utopia, and the risk of having your private informations leaked is a real risk 99% of crypto enthusiasts have to take, otherwise they won't be able to remain active on this industry at most platforms it has to offer to crypto adopters, since they are heavily regulated by local authorities from the countries where they offer services.

[oktana]

3. "You" have to ask for KYC from users, which will most probably scare off a big number of the potential customers.

The third point here is just about the main deal. This is because asking KYC in cryptocurrency related business is weird. We should have that feature of privacy that no one knows any of your information. Having to WILLINGLY submit KYC and even many more information is not something that I’d do. KYC scares so many people because of various reasons, which also includes data theft. 

It's so common for crypto businesses to enforce KYC procedure nowadays. It was weird in the early years of this industry, although now it's already pretty usual, being weird for a business to not demand personal informations from users in order to let them use the platform's services these days. If you want to cashout crypto to fiat right now, you probably have to give your personal ID to an exchange at some point, otherwise how are you going to cashout your profits from crypto investments?

Even if you do P2P transactions, the person on the other side of the transaction will have access to your bank account's informations. Privacy is an utopia, and the risk of having your private informations leaked is a real risk 99% of crypto enthusiasts have to take, otherwise they won't be able to remain active on this industry at most platforms it has to offer to crypto adopters, since they are heavily regulated by local authorities from the countries where they offer services.

I don’t think it’s so much of a problem if someone during P2P sees your bank account name because it’s only your name but nothing exactly about you is exposed. But if you talk about giving your details to these exchanges, it’s very different because they will know your house address, your age, name, next of kin, and everything needed to track you (if they wanted). There’s really a lot of difference compared to when doing P2P to a stranger who doesn’t care what your name is.

[Alone055]

Even if you do P2P transactions, the person on the other side of the transaction will have access to your bank account's informations. Privacy is an utopia, and the risk of having your private informations leaked is a real risk 99% of crypto enthusiasts have to take, otherwise they won't be able to remain active on this industry at most platforms it has to offer to crypto adopters, since they are heavily regulated by local authorities from the countries where they offer services.

You are right, but we are still not at the worst end because we still have decentralized platforms that we can use without having to complete KYC verification at least, although sharing bank or account details to receive the funds becomes a necessity. After all, otherwise, how the person, on the other hand, would pay you and know that he is paying the correct person? So for P2P trades, we can't help but share our details with the person we are trading even if the platform is decentralized, however, for other purposes, we can still avoid doing KYC verification.

We should think about the times in the future when there won't be any decentralized options available for us to use. We know how fast the regulatory pressure is increasing in the industry and every platform is getting regulated by the authorities, they will hunt down decentralized platforms in the future as well for sure, and once that happens, we will have absolutely no option but to comply with their rules and regulations and provide them with whatever they demand to be able to use services that we need because you don't have an option.