German Bank announces to support Bitcoin; says it's important to own private key

[1miau]

Recently, a famous German Bank (Volksbanken Raiffeisenbanken, Bayern Mitte) has announced to consider offering Bitcoin services. It happened a few days ago already but it’s a very bullish news if you look at 2 facts:


1. All Volks- und Raiffeisenbanken in Germany will be likely to follow and have around 30 millions of customers.


2. How it was announced:

• All employees will be educated in workshops about Bitcoin, including the most important topics.
• Andreas Streb, board director, said „sooner or later, Bitcoin will be important for every Bank and every company“, so he suggested to start adopting it as soon as possible because it’s important for him to stay ahead of foreign players or even local startups. In addition he wants to offer a safe, established environment for his customers to avoid the risk to get scammed by shady foreign exchanges or getting hacked.
• Only Bitcoin will be offered:
  „We will only offer Bitcoin, not other Crypto assets. Quite simply because only Bitcoin is really a decentralized blockchain application and from our point of view only Bitcoin offers sufficient security against manipulation. All other crypto assets are not comparable to Bitcoin. Above all, they are not decentralized, but there are companies or business models behind influencing the respective Crypto value.“
• Most important point: it’s important to own your Bitcoins:
  „The most important topic when trading or storing Bitcoin is to be owner of your so-called private key, (secret key allowing access to your Bitcoin). This is where our first considerations were made.
  Which trustworthy solutions can we offer for our customers? Many crypto platforms only give limited or no access to private keys because all Bitcoins are centrally stored on behalf of the customer.
  […] Bitcoin centrally stored by platforms is of course an interesting target for hackers. This also counteracts the decentralized storage in the Bitcoin blockchain. That's why we were looking for solutions in which the customer keeps his private key himself and can therefore own his Bitcoin himself.“

It’s a very bullish signal if a board director of a German bank points out what’s important about Bitcoin (education about Bitcoin’s tech, supporting a really decentralized coin (no shitcoins), not your keys not your coins).
We would expect such statements from most long-time forum members, but it’s surprising to hear it from a board director of a German bank.
100% bullish.

It was published here (German), very recommended read (if you translate it): https://www.profil.bayern/12-2021/praxis/bitcoin-wir-lassen-unsere-kunden-nicht-alleine/

[1715532713]

1715532713

[titular]

It's very refreshing to see a banking institution with such an attitude towards digital currency. Bitcoin in particular.

The most important topic when trading or storing Bitcoin is to be owner of your so-called private key, (secret key allowing access to your Bitcoin). This is where our first considerations were made.
Which trustworthy solutions can we offer for our customers? Many crypto platforms only give limited or no access to private keys because all Bitcoins are centrally stored on behalf of the customer.

Reading this puts a smile on my face. Not only are they advocating for bitcoin, they are educating people that owning your private key is important. Very pleased to see a bank take this angle.

[BIT-BENDER]

Recently, a famous German Bank (Volksbanken Raiffeisenbanken, Bayern Mitte) has announced to consider offering Bitcoin services. It happened a few days ago already but it’s a very bullish news if you look at 2 facts:

I have always said that the struggle isn't against banks or Fiat the struggle is to educate as much people as the possible the benefits of adopting Bitcoin and crypto-currency, I think am in support of a free would, and a world where also banks can give it's customer the legit permission to deal in crypto-currency or fait according to their preference. If this happens from this German bank I think it would lead to a healthy coexistence between Fiat and crypto-currency, but after a while I think everyone one would know which should be more preferred my best bet is crypto-currency.

[jackg]

The first point is definitely an important one to allow the bank to educate customers on the features of bitcoin (such as the fact it can't be charged back).

I feel, though, that banks will initially start offering this service on request and won't point its customers in the direction of it explicitly (so it'll take quite a few years to be fully adopted).

4 is very interesting too but for usability the bank may also want to control (or at the very least) store backups of the private keys they issue their customers.

[hosseinimr93]

4 is very interesting too but for usability the bank may also want to control (or at the very least) store backups of the private keys they issue their customers.

I read the article completely. It seems that they won't store users private keys and will let them to be the only and the real owner of their fund.

From the translated version of the article shared by 1miau (done by google translator):

The customer manages his private key himself, we have no way of accessing his Bitcoin, and so we do not store it.

They even encourage people to use cold wallets.

If you decide to invest in Bitcoin, we will help you with the purchase of the necessary digital purse, the so-called wallet. We want to support the customer so that he can keep his Bitcoins himself. We also offer customers a so-called "cold wallet"

[m2017]

This can cause a chain reaction. Banks from other countries will also join this game in order to keep up with pioneers like German bank. That's when the fun begins when other bank start making such statements at the distillation.

German bank is not a bank from some 3rd world country with a weak economy and opportunities. This event could be the reason for a very serious surprise in the coming year.

In fact, such a statement from a bank representative seems to me very unexpected. Are the previous stages of Grief completed and bank's "accepance" stage started?  

[Gyfts]

Most important point: it’s important to own your Bitcoins:
The most important topic when trading or storing Bitcoin is to be owner of your so-called private key, (secret key allowing access to your Bitcoin). This is where our first considerations were made.

I don't think the vast majority of Bitcoin holders understand how important this concept is. Any coin to which you do not hold ownership of the private keys are not your coins, it's merely an agreement between you and the true owner of the private key that the coin is yours, subject to change on a whim by the private key's owner. The number of crypto investors that store their crypto on exchanges or 3rd party apps is palpable. Seeing a bank take this approach is refreshing.

[BlackHatCoiner]

A good question is:  Why would a bank want to give the option to their customers to hold bitcoin themselves? Isn't it against the whole point of a bank? I mean it's fine if they announce that they keep reserves in bitcoin, but why promoting it as a currency if it makes your business poorer?

The thing I like the most from their policy is this:

We will only offer Bitcoin, not other Crypto assets. Quite simply because only Bitcoin is really a decentralized blockchain application and from our point of view only Bitcoin offers sufficient security against manipulation. All other crypto assets are not comparable to Bitcoin.

[mynonce]

A good question is:  Why would a bank want to give the option to their customers to hold bitcoin themselves? Isn't it against the whole point of a bank?

You have already mentioned the strict regulatory requirements. Does your offer fall under the crypto custody business and thus under the BaFin authorization requirement?

Streb: No. That is the jumping point. Because the customer manages his private key himself, we have no way of accessing his Bitcoin, and so we do not store it. So we don't fall under the crypto custody business either. With our offer, we focus on educating our customers about Bitcoin and supporting them in choosing and setting up their Bitcoin wallet. The fact that we don't need a BaFin license makes a lot of things easier.

translation by Google

[hatshepsut93]

I'm really not suprised, because Bitcoin is not a full replacement for banks, so it was always a possibility that banks would offer Bitcoin services and earn money with them. For example, you can't lend Bitcoin in a decentralized way, so a bank would be needed for that.

Also, I'm really glad to see that Bitcoin maximalism is represented among the high-profile adopters, the world is starting to realize that blockchain technology and altcoins are not even 1% as useful as they claim to be/

[Welsh]

I'm really not suprised, because Bitcoin is not a full replacement for banks, so it was always a possibility that banks would offer Bitcoin services and earn money with them. For example, you can't lend Bitcoin in a decentralized way, so a bank would be needed for that.

I'm only surprised by the way they're going about it; providing education to their employees, announcing only Bitcoin, and not any other Altcoin, and pushing the fact that owning a private key is important. Technically, they could offer their services without suggesting to own the private key, which speaks tenfold about their trustworthiness. Hopefully, they'll incorporate into their services that the client will be required to own the private key, and not just suggest it. I guess, if a client wanted too they could opt out, but by default it should be that way I think.

I understand that not everyone wants to be completely responsible for their money, and therefore banks or some sort of third party is likely forever going to be needed. Although, I think by default at the very least the client should be offered what they want to do by default, and be explained without bias on what that exactly means.

[ShowOff]

It’s a very bullish signal if a board director of a German bank points out what’s important about Bitcoin (education about Bitcoin’s tech, supporting a really decentralized coin (no shitcoins), not your keys not your coins).
We would expect such statements from most long-time forum members, but it’s surprising to hear it from a board director of a German bank.
100% bullish.

When bank started considering bitcoin then I think they have knocked on the door of a lot of institutional investors to get more involved in this investment. I don't wonder why they are willing to only support bitcoin "not altcoin" because I think they have studied it well and know all the innovation that exist in bitcoin.

From the way they teach bitcoin to many people, I'm sure they have studied it for a long time and compared how bitcoin is the only one among thousands of other cryptocurrencies. Yes it's only about bitcoin, not altcoin.

[mynonce]

I don't wonder why they are willing to only support bitcoin "not altcoin" because I think they have studied it well and know all the innovation that exist in bitcoin.

From the way they teach bitcoin to many people, I'm sure they have studied it for a long time and compared how bitcoin is the only one among thousands of other cryptocurrencies. Yes it's only about bitcoin, not altcoin.

Streb: One thing first: We deal exclusively with Bitcoin, not with other crypto values. Quite simply for the reason that Bitcoin is the only real decentralized blockchain application and, from our point of view, only this offers sufficient security against manipulation. All other crypto values are not comparable to Bitcoin. Above all, they are not structured in a decentralized manner, but rather there are companies or business models behind them that can theoretically or also very practically influence the respective crypto value.

translation by Google


In short:
Bitcoin is the only real decentralized one, others can be manipulated.

[1miau]

4 is very interesting too but for usability the bank may also want to control (or at the very least) store backups of the private keys they issue their customers.

I read the article completely. It seems that they won't store users private keys and will let them to be the only and the real owner of their fund.

From the translated version of the article shared by 1miau (done by google translator):

The customer manages his private key himself, we have no way of accessing his Bitcoin, and so we do not store it.

That's also my impression from their description so far, that only the customer has access to his BTC but I don't know because it's not finalized yet and how it'll be implemented in detail.

Especially how it will look like when people buy BTC, there needs to be some centralized wallet and after that, the bought BTC will be sent to the address owned by the customer.
At least such a procedure would be normal.

A good question is:  Why would a bank want to give the option to their customers to hold bitcoin themselves? Isn't it against the whole point of a bank? I mean it's fine if they announce that they keep reserves in bitcoin, but why promoting it as a currency if it makes your business poorer?

It's not uncommon for Volksbanken Raiffeisenbanken / Sparkasse in Germany because their business model is indeed very decentralized. It's called Genossenschaftsbank in Germany, somehow comparable to Cooperative banking. And in Germany, there are many partially independant, local branches (like for that Example Bayern Mitte (middle Bavaria)) and such banks are very customer friendly.

By selling / converting BTC, the bank would still make a profit and the article also mentions to sell education-courses for customers interested in Bitcoin (most likely inlcuding informational material).

After all, it's possible, that the bank and the customer end up having a profit.

[DapanasFruit]

As far as banks can be concerned, in my own opinion, this is going to be one of the best good news we can be hearing for a long time...or maybe not if other banks of the same nature and stature can be following the same path this bank is taking on Bitcoin. What is impressive is that this is not just a plan but there is a definite actions that are being and will be be taken - and central to that is educating their own employees and most probably their millions of customers on cryptocurrency and other related matters. And not to complicate things, the bank is not going to be the custody of the Bitcoin which their customers may choose to buy through them. Am I correct, that this German bank is acting like a broker for their many customers who can be enticed to invest with Bitcoin?

[Lorence.xD]

This can cause a chain reaction. Banks from other countries will also join this game in order to keep up with pioneers like German bank. That's when the fun begins when other bank start making such statements at the distillation.

I can agree that a chain reaction might happen but our expected chain reaction aren't going to happen because some EU countries are definitely going to resist this one unless all or the most influential banks in each EU country would adopt bitcoin but if they're the big opposers then they will probably have a hard time.

[michellee]

Hopefully, that can reach more people in Germany and increase awareness about bitcoin. If the banks finally realize the benefits of bitcoin, that will just be a matter of time to see bitcoin will grow fast in Germany. Yes, it is a bullish signal for bitcoin and that can help the price lift and break the highest price.

If more and more workshops are available in many places in Germany, people can learn it easily and understand how to use bitcoin. It is enough if they only learn about bitcoin as the main course of cryptocurrency as they can learn about altcoin later after they know what bitcoin is.

[pooya87]

By selling / converting BTC,

Does this mean that this bank is going to start buying bitcoin so that they can sell it to customers who want it or does it mean that the bank is going to act like a centralized exchange and only receive commission for letting people trade in their platform?

[Poker Player]

 I too was having a hard time understanding why a bank would want to shoot itself in the foot (from a traditional banking point of view) until I read this:

It's not uncommon for Volksbanken Raiffeisenbanken / Sparkasse in Germany because their business model is indeed very decentralized. It's called Genossenschaftsbank in Germany, somehow comparable to Cooperative banking. And in Germany, there are many partially independant, local branches (like for that Example Bayern Mitte (middle Bavaria)) and such banks are very customer friendly.

By selling / converting BTC, the bank would still make a profit and the article also mentions to sell education-courses for customers interested in Bitcoin (most likely inlcuding informational material).

Apart from that:

This can cause a chain reaction. Banks from other countries will also join this game in order to keep up with pioneers like German bank. That's when the fun begins when other bank start making such statements at the distillation.

What you say is very unlikely. What we are seeing here is the exception and not the norm. This is a special kind of bank, but big banking if it adopts Bitcoin is going to be to offer custodial services, Bitcoin-backed loans, etc. Precisely the Bitcoin originated against big banking, who, in addition to central banks, can also create money out of thin air thanks to the fractional reserve system.

[SquirrelJulietGarden]

„We will only offer Bitcoin, not other Crypto assets. Quite simply because only Bitcoin is really a decentralized blockchain application and from our point of view only Bitcoin offers sufficient security against manipulation. All other crypto assets are not comparable to Bitcoin. Above all, they are not decentralized, but there are companies or business models behind influencing the respective Crypto value.“

It's only beginning. Bitcoin first and if they see that it is good, they will expand to other cryptocurrency. In the end, banks must maintain their customer and transaction activities because it affects bank income. They can not simply ignore Bitcoin or cryptocurrency if in future, people change to become more prefer Bitcoin and crypto for transactions.

„The most important topic when trading or storing Bitcoin is to be owner of your so-called private key, (secret key allowing access to your Bitcoin). This is where our first considerations were made.
Which trustworthy solutions can we offer for our customers? Many crypto platforms only give limited or no access to private keys because all Bitcoins are centrally stored on behalf of the customer.
[…] Bitcoin centrally stored by platforms is of course an interesting target for hackers. This also counteracts the decentralized storage in the Bitcoin blockchain. That's why we were looking for solutions in which the customer keeps his private key himself and can therefore own his Bitcoin himself.“

It sounds good but I don't believe it if it is given by banks. Banks are related to governments so they will do want to ask KYC and trace customer capital flows. If they don't store private keys of users, it will be like DEX. DEX with KYC and run by government-backed banks, it is something wrong.

Anyway, the adoption is great as a very promising beginning.