Hashbank adds crypto with external withdrawals, a different bank model?

[DKeller]

Just saw that Hashbank, a digital bank licensed by the National Bank of Georgia and part of W Group, added crypto in its app: around 150 coins, deposits from external wallets, and withdrawals to any address.

Compare that with Schwab, which launched with only BTC and ETH, a 0.75% fee per trade, and no moving coins in or out at launch. So at most big banks you're basically just buying price exposure, while here you can send the coins to your own wallet.

If a regulated bank can do real withdrawals, the whole "banks can only offer closed-loop crypto" argument looks a bit weaker. It also shows how much easier this is when the crypto side comes from a sister exchange instead of being built from zero. Georgia is a small market, though; I have no idea how something like this would get through regulators in the EU or US.

Do you think bigger banks will have to allow withdrawals to self-custody at some point, or will closed-loop stay the norm?
And for a bank, is being tied to an exchange a plus or more of a risk?

[Dunamisx]

Do you think bigger banks will have to allow withdrawals to self-custody at some point, or will closed-loop stay the norm?
And for a bank, is being tied to an exchange a plus or more of a risk?

In as much as I will always support the banks from using crypto payments, I will also raise the alarm that this is not completely a safety measure for us in cryptocurrency, because there is no privacy that will be maintained in doing so, the banks has all our user information and will definitely relate it to our crypto identity, easy way for them to track on us and know our worth and value, Bank should independently operate cryptocurrency while we should also decided to go for privacy by taking the necessary measures to avoid running under a centralized platform.

[eternalgloom]

No, it doesn't seem likely that it will happen so soon. Schwab or Fidelity's closed loop system  are not result of any technical inability. Their main obstacle are strict regulation such as AML and Travel Rule.

However once MiCA or US Clarifying Regulation come fully into effect, they might introduce external transfer on limited scale to remain competitive. Something like whitelisting dynamic addresses. But they won't easily grant 100% freedom like Georgia.

[noorman0]

-snip-
Compare that with Schwab, which launched with only BTC and ETH, a 0.75% fee per trade, and no moving coins in or out at launch. So at most big banks you're basically just buying price exposure, while here you can send the coins to your own wallet.

In my opinion, Schwab is the more prudent company; they don't expose clients to excessive risk. A wider variety of altcoins would mean more backend work, especially given that the crypto space seems to have lost public trust recently due to security protocol failures on several platforms.

-snip-
Do you think bigger banks will have to allow withdrawals to self-custody at some point, or will closed-loop stay the norm?

To be honest, users don't need to deposit money into a bank; there is no valid reason for it.

[DKeller]

No, it doesn't seem likely that it will happen so soon. Schwab or Fidelity's closed loop system  are not result of any technical inability. Their main obstacle are strict regulation such as AML and Travel Rule.

However once MiCA or US Clarifying Regulation come fully into effect, they might introduce external transfer on limited scale to remain competitive. Something like whitelisting dynamic addresses. But they won't easily grant 100% freedom like Georgia.

Agree it's not a tech problem, but I'm not sure regulation is the whole story either.

Exchanges in the EU already deal with the Travel Rule and still let you withdraw, so banks could do it if they wanted to. Feels more like risk appetite to me tbh. Whitelisted addresses would probably be the first step though, that sounds realistic.