Minnesota legalizes bitcoin custody services for banks, credit unions

[Oshosondy]

Cryptocurrencies was on the bill signed by Governor Tim Walz, not only bitcoin. The new law authorizes banks and credit unions to provide virtual-currency custody services in a nonfiduciary capacity from Aug. 1.

https://cointelegraph.com/news/minnesota-crypto-custody-services-banks-credit-unions-law

More states in the United States will probably do the same, also more countries.

Some people will say this is not how bitcoin is intended to be, that there should not be a central body before you can transfer your bitcoin to another person. Yes, that is true, but you always have the P2P option by using the noncustodial wallet.

[hugeblack]

The question is, will users be able to withdraw Bitcoin from these wallets?

Compared to TrustWallet, Exodus Wallet, and other closed-source wallets, these might be a better option (although I recommend well-reviewed open-source wallets or hardware wallets).

[toryn388]

Custody services are fine as long as people remember they’re optional, not the whole point of Bitcoin.

[MinoRaiola]

Some people will say this is not how bitcoin is intended to be, that there should not be a central body before you can transfer your bitcoin to another person. Yes, that is true, but you always have the P2P option by using the noncustodial wallet.

Thats right, if you can, you should manage your Bitcoin yourself. No one else should have access to it, or maybe someone in your family. However, if doing so offers an advantags to getting a loan and paying lower interest rates, then it maybe better. This can reduce the securityrisk and help you save money in the long run. You can still withdraw your coins after signing agreement  It is not bad, but they should only do if it gives an advantage.

[Oshosondy]

The question is, will users be able to withdraw Bitcoin from these wallets?

I do not see it as wallet, I see it has banks helping their customers to save their bitcoin and other crypto assets that they support. Yes, the customers will be able to withdraw their coins. There have been some banks that are going this. I have a friend in UK (not US) that buy bitcoin this way and have it in the bank some years ago.

Custody services are fine as long as people remember they’re optional, not the whole point of Bitcoin.

You are right, but some people do not have the knowledge about exchanges and noncustodial wallets, this will be an option for such a people if they can not go for ETF.

I prefer the noncustodial way, but this might make some people buy bitcoin.

[hugeblack]

I do not see it as wallet, I see it has banks helping their customers to save their bitcoin and other crypto assets that they support. Yes, the customers will be able to withdraw their coins. There have been some banks that are going this. I have a friend in UK (not US) that buy bitcoin this way and have it in the bank some years ago

If they give users the opportunity to extract the private key, then they are a wallet, whether the user is the only one who can access the private key, or they access an encrypted copy of it, or as part of a multi-signature wallet setup.

[bitmover]

The question is, will users be able to withdraw Bitcoin from these wallets?

I do not see it as wallet, I see it has banks helping their customers to save their bitcoin and other crypto assets that they support. Yes, the customers will be able to withdraw their coins. There have been some banks that are going this. I have a friend in UK (not US) that buy bitcoin this way and have it in the bank some years ago.

In Brazil I believe 90% (or more) of banks allows you to buy and sell bitcoin. Even the biggest banks.

But basically none of them allow you to withdrawal. You can buy and sell and pay taxes, but no withdrawal, no p2p selling, etc.

I think that even with such limitations, the bitcoin support is positive and good for bitcoin. People feel more confident about buying bitcoin in a bank, and they can also become more interested about it and google about it. They will quickly find information about wallet, custodial services, etc and they can decide to buy somewhere else and make their own custody or not.

[Synchronice]

The question is, will users be able to withdraw Bitcoin from these wallets?

I do not see it as wallet, I see it has banks helping their customers to save their bitcoin and other crypto assets that they support. Yes, the customers will be able to withdraw their coins. There have been some banks that are going this. I have a friend in UK (not US) that buy bitcoin this way and have it in the bank some years ago.

Custody services are fine as long as people remember they’re optional, not the whole point of Bitcoin.

You are right, but some people do not have the knowledge about exchanges and noncustodial wallets, this will be an option for such a people if they can not go for ETF.

I prefer the noncustodial way, but this might make some people buy bitcoin.

It basically means that banks will be able to safeguard, control and manage private keys on behalf of customers. Logically, this gives banks the possibility to offer crypto withdrawal as an option to the users but it doesn't mean they'll 100% do it. They still can disable crypto withdrawals if they want.

By the way, since this article says that banks may hold crypto in a custodial capacity, I expect customers to retain ownership of their coins.

I predict that this will slowly spread like a virus and soon lots of states and countries will offer similar service to customers, which means that crypto's market cap will significantly increase.

[Oshosondy]

But basically none of them allow you to withdrawal. You can buy and sell and pay taxes, but no withdrawal, no p2p selling, etc.

It basically means that banks will be able to safeguard, control and manage private keys on behalf of customers. Logically, this gives banks the possibility to offer crypto withdrawal as an option to the users but it doesn't mean they'll 100% do it. They still can disable crypto withdrawals if they want.

This is true, it is deposit or have fiat in the bank, convert it or part of it to bitcoin or other coins the bank is listed, convert the coin back to fiat anytime you want. This is what I an trying to say, but the way I said it is truly completely wrong as it is not a direct crypto withdrawal like on exchanges.

[AmoreJaz]

The question is, will users be able to withdraw Bitcoin from these wallets?

I do not see it as wallet, I see it has banks helping their customers to save their bitcoin and other crypto assets that they support. Yes, the customers will be able to withdraw their coins. There have been some banks that are going this. I have a friend in UK (not US) that buy bitcoin this way and have it in the bank some years ago.

In Brazil I believe 90% (or more) of banks allows you to buy and sell bitcoin. Even the biggest banks.

But basically none of them allow you to withdrawal. You can buy and sell and pay taxes, but no withdrawal, no p2p selling, etc.

I think that even with such limitations, the bitcoin support is positive and good for bitcoin. People feel more confident about buying bitcoin in a bank, and they can also become more interested about it and google about it. They will quickly find information about wallet, custodial services, etc and they can decide to buy somewhere else and make their own custody or not.

Any activity which utilize the use of btc can be considered as adoption. It may not have the usual financial transaction but once btc is in between or involved in the system, somehow, you are already promoting the use of this digital currency.

[Z-tight]

I do not know how to react to this news, but as i like to say, i do not get to tell people what they would do with their coins. Their keys, their coins. Would i use this banking service if it was offered in my state? Of course i would not. But people store their coins in different third party services, so i am sure many people wouldn't mind using this service and it may even offer them better security.

[sokani]

It basically means that banks will be able to safeguard, control and manage private keys on behalf of customers.

Sure... the bank will have custody of funds, but that does not mean they will have custody of the private keys. My guess is that subscribers will transfer their assets to a wallet owned by the bank. The banks will have a record of users as well as the amount of coins they owned.

Logically, this gives banks the possibility to offer crypto withdrawal as an option to the users but it doesn't mean they'll 100% do it. They still can disable crypto withdrawals if they want.

Or they may disable it and enable withdrawal in fiat. That's users seeking withdrawals will receive the fiat equivalent of their coins. I think it is most likely what most of the banks would do.

[Cryptomultiplier]

Cryptocurrencies was on the bill signed by Governor Tim Walz, not only bitcoin. The new law authorizes banks and credit unions to provide virtual-currency custody services in a nonfiduciary capacity from Aug. 1.

https://cointelegraph.com/news/minnesota-crypto-custody-services-banks-credit-unions-law

More states in the United States will probably do the same, also more countries.

Some people will say this is not how bitcoin is intended to be, that there should not be a central body before you can transfer your bitcoin to another person. Yes, that is true, but you always have the P2P option by using the noncustodial wallet.

I believe strongly that it is even because the U.S accepted cryptocurrency and even own a reserve for it, that suddenly made the citizens see light there and want to also own some of it or even transact with it. The U.S is also a leader in the world and may have also influenced some countries to accept it too.
Although this contravene the true ethos of Bitcoin, being decentralized and permissionless, it somehow have created alternate system which allows for its use by different people who were not convinced or understood what the decentralized systems was, maybe because they are too pious or follow the laws in total and fear prosecution.

The oldies would have no problem alternating between the centralized and decentralized technology because of their original knowledge, it is only those who came onboard newly because of the official acceptance, that gets limited in a way from the decentralized systems.

[Dr.Bitcoin_Strange]

Well, even if I lived in that region, as someone who has been this exposed to bitcoin, I can not use bank service to buy, sell and hold bitcoin no matter how good the service is, I can't use it to hold my coins while there are non custodial wallets that I can use for that and there are also some cex that can allow me buy and withdraw bitcoin without asking for KYC and there are still means for me to do normal  face to face p2p. Except I'm completely limited from all those other options before I can bend to this.

[Satofan44]

In Brazil I believe 90% (or more) of banks allows you to buy and sell bitcoin. Even the biggest banks.

But basically none of them allow you to withdrawal. You can buy and sell and pay taxes, but no withdrawal, no p2p selling, etc.

I think that even with such limitations, the bitcoin support is positive and good for bitcoin. People feel more confident about buying bitcoin in a bank, and they can also become more interested about it and google about it. They will quickly find information about wallet, custodial services, etc and they can decide to buy somewhere else and make their own custody or not.

It is a big question if those banks are buying anything at all or instead they are giving users fake exposure to a market. If there is no real buying or there is only buying of a paper ETF, then the only remaining benefit is the exposure/availability to the Bitcoin name which is a quite limited benefit. In fact, given the amount of price performance suppression that such fake buying causes it would be quite questionable to even establish that the benefit of this whole thing outweighs the negatives. I would easily proclaim that fake exposure is worse than no exposure at all. Any kind of Bitcoin adoption must include the ability to withdraw, otherwise it is bullshit. If Revolut can do it, others can too. https://help.revolut.com/help/wealth/cryptocurrencies/crypto-withdraw-deposit/

Logically, this gives banks the possibility to offer crypto withdrawal as an option to the users but it doesn't mean they'll 100% do it. They still can disable crypto withdrawals if they want.

Or they may disable it and enable withdrawal in fiat. That's users seeking withdrawals will receive the fiat equivalent of their coins. I think it is most likely what most of the banks would do.

That is not a withdrawal that is a sale, learn the difference between basic words before you comment here.

Well, even if I lived in that region, as someone who has been this exposed to bitcoin, I can not use bank service to buy, sell and hold bitcoin no matter how good the service is, I can't use it to hold my coins while there are non custodial wallets that I can use for that and there are also some cex that can allow me buy and withdraw bitcoin without asking for KYC and there are still means for me to do normal  face to face p2p. Except I'm completely limited from all those other options before I can bend to this.

This development was not made for you, neither it is addressed to you so why are you talking about it as if your personal opinion on it was requested? There are many entities and individuals who this is for, and they will use it regardless of what you do -- in the context that this is provided, your own opinion is irrelevant.

Cryptocurrencies was on the bill signed by Governor Tim Walz, not only bitcoin. The new law authorizes banks and credit unions to provide virtual-currency custody services in a nonfiduciary capacity from Aug. 1.

https://cointelegraph.com/news/minnesota-crypto-custody-services-banks-credit-unions-law

More states in the United States will probably do the same, also more countries.

The real benefit of this is getting most of the Democrats in line before any potential government change, although I have predicted that they will bend the knee in many threads because they are one of the most corrupted, worst pieces of shit that have ever existed yet they pretend to be the saviors. 

[tbct_mt2]

Some people will say this is not how bitcoin is intended to be, that there should not be a central body before you can transfer your bitcoin to another person. Yes, that is true, but you always have the P2P option by using the noncustodial wallet.

People already have been familiar with centralized exchanges, use these exchanges and let their coins on centralized exchanges a very long time. They feel safe and have no issues with centralized exchanges, so they will not suddenly feel issues with banks, credit unions.

It can be argumentative with many people if I say that most people don't care about decentralization of Bitcoin blockchain, and non custodial wallets. It's just fact as people feel convenience is like their priority, not safety of their funds as they should do that.

This legalization in Minnesota is another good adoption growth for Bitcoin and is another piece for triggering Bitcoin snowball effects, so let's feel happy and celebrate it together.

[Satofan44]

Some people will say this is not how bitcoin is intended to be, that there should not be a central body before you can transfer your bitcoin to another person. Yes, that is true, but you always have the P2P option by using the noncustodial wallet.

People already have been familiar with centralized exchanges, use these exchanges and let their coins on centralized exchanges a very long time. They feel safe and have no issues with centralized exchanges, so they will not suddenly feel issues with banks, credit unions.

The argument is not that they would feel less safe, so while what you have written is true it is not like you are contradicting some point that was made here. Easily one can deduct that they are likely to feel more safe with traditional custodians and familiar names than they would with exchanges that are registered somewhere else in the world, or even one that is domestic such as Coinbase. A big bank losing their Bitcoin is less likely to go bust than an exchange that entirely relies on cryptocurrencies and also does other shenanigans to gain some profit, unless the bank's Bitcoin business is extremely large which is unlikely.

It can be argumentative with many people if I say that most people don't care about decentralization of Bitcoin blockchain, and non custodial wallets. It's just fact as people feel convenience is like their priority, not safety of their funds as they should do that.

There is nothing "argumentative" about that, it is simply a fact -- anyone who wants to argue against it is an idiot that should be silenced. The argument is not about the numbers, but on whether people should live like that and the answer is still a clear no. Anyone who prioritizes convenience over things that actually matters is a terrible human. I can understand cases where the technological competency is not given, but that has nothing to do with convenience. There are old people that are rich but can barely use a phone at all, they should never self-custody.

This legalization in Minnesota is another good adoption growth for Bitcoin and is another piece for triggering Bitcoin snowball effects, so let's feel happy and celebrate it together.

Yes.

[Charles-Tim]

There is nothing "argumentative" about that, it is simply a fact

Some people can argue about it. It is just their opinion, not that they are idiots. I think it is a good opinion that can let more people still know what bitcoin actually is. I still see some people that are saying bitcoin is losing its purpose everyday and this is a good example that they can make. But the fact has not changed, anyone that seek knowledge about bitcoin and want to be private and have full control over his own coins can still do.