imagine having to 'sales pitch' bitcoin to..... a bank

[franky1]

there has been alot of waffle over the last 5 years that banks would hate bitcoin. but has anyone actually made a pro's and cons list for banks?

Well we heard alot of negative cons people percieve the banks would not like. such as:
they cant screw average joe
they cant manipulate it/control it
they cant simply make money appear from nothing

but what about the pro's, so lets start it off:
1) their hedge funders and brokers can still play the markets in their comfy leather chairs and continue to get their bonuses
2) they can shut brick and mortar banks as they wont need customer walk-in's, thus saving on building costs/maintenance per town
3) they can reduce staff numbers EG low level security/customer counter staff meaning a huge expenditure saving
4) no need to produce plastic cards and mail them out, saving a few dollars per customer
5) no need to produce paper bank statements and mail them out, saving a few dollars per customer
6) hoarding customers funds for a year, will make them profits without even having to play the markets
7)....(you fill in the blanks)

[Ektra]

6) hoarding customers funds for a year, will make them profits without even having to play the markets

Not if the customer then wants to have the same number of coins back, surely. It would pretty much be embezzlement (though then again, wouldn't put it past them at all).

[AmDD]

Ive also read a lot about how banks will hate Bitcoin and I dont see it.If you think of Bitcoin as cash (its considered digital cash, right?) then its not very different from what they use and deal with today. If you keep cash USD in your pocket, the bank or any company/person can not take it from you (unless they beat you or something) which is the same as Bitcoin. However its when you put your money in a bank account that they have the power to take it. The same could be done if you put your Bitcoin in a "bank account" like any online wallet service. In a sense those online wallet services are Bitcoin banks.

[franky1]

6) hoarding customers funds for a year, will make them profits without even having to play the markets

Not if the customer then wants to have the same number of coins back, surely. It would pretty much be embezzlement (though then again, wouldn't put it past them at all).

imagine FIAT customers put money into an account and the bank "secures it against inflation" by holding it as bitcoin (guaranteeing they will get the exact fiat back when the customer requests their fiat) as terms of the special savings bank account (making it lawful for the bank to do it.)

mostly embezzlement is about 'people' who embezzle funds, afterall banks make money messing with customer funds all the time. yet if the employee's done it for personal use (moved it into the employees own account. thats a different story
http://www.newsday.com/news/region-state/former-bank-manager-pleads-guilty-to-embezzlement-1.8970248

[Yakamoto]

Ive also read a lot about how banks will hate Bitcoin and I dont see it.If you think of Bitcoin as cash (its considered digital cash, right?) then its not very different from what they use and deal with today. If you keep cash USD in your pocket, the bank or any company/person can not take it from you (unless they beat you or something) which is the same as Bitcoin. However its when you put your money in a bank account that they have the power to take it. The same could be done if you put your Bitcoin in a "bank account" like any online wallet service. In a sense those online wallet services are Bitcoin banks.

Actually, it is pretty different, believe it or not. The key phrase is fractional reserve lending. Do to the limited supply of Bitcoins, it's harder to do FRL. A lot of the world's currency is created by FRL, probably anywhere from 75% upwards, and that remaining 25% is created by the government.

The rest of your points are valid, however. Bitcoin, when in an online wallet service, can be taken. If you keep your coins in your own wallet, they can only be taken via force.

Back to the OP;

Trying to pitch Bitcoin to a bank will be incredibly difficult. However, if you can convince them that they'd be making money from Bitcoin trading and the like, you could possibly convince them...

[wasserman99]

I really don't think that banks "hate" bitcoin, but rather they partly do not understand it. If they do not understand something then they will likely not want anything to do with it. This is simple business and is not anything against bitcoin per say.

Another reason banks try to "avoid" bitcoin is due to AML issues. There are a lot of traders who use their personal bank accounts for business purposes, and they transact huge amounts of dollars into and out of their account. Most of these traders are likely not following MSB requirements even though they should be. Banks need to perform some level of due diligence regarding this and it is very hard to do so.

I think once Obama leaves office (and the regularity environment gets much better), banks will likely be much more accepting of bitcoin.

[keithers]

I guarantee you that banks are looking closely at Bitcoin, and sooner or later, one of the majors will take the jump.   I have personally seen and read an internal memo from Wells Fargo with the research that they have done on Bitcoin and (cryptocurrencies in general).   

They won't do it until they feel there is a big enough threat to their bottom line to not incorporate BTC.   As of right now, Bitcoin is too small for it to be worth the cost of the time, training, technological platforms to integrate, etc...

[counter]

Yea but they don't get to create funds out of thin air with derivatives and they can't turn around mis manage the funds based on the transparency of Bitcoin ledger.  They would have trouble operating business as usual if the networks they usually to operate in don't accept Bitcoin.  It's not just pitching it to one or two banks but the banking system as a whole would have to accept Bitcoin IMO.

[franky1]

Yea but they don't get to create funds out of thin air with derivatives and they can't turn around mis manage the funds based on the transparency of Bitcoin ledger.  They would have trouble operating business as usual if the networks they usually to operate in don't accept Bitcoin.  It's not just pitching it to one or two banks but the banking system as a whole would have to accept Bitcoin IMO.

you do realise that in the 1950's banks didnt bother hoarding bank notes for decades. most of the time they accepted in bank notes from customers and used it to purchase gold. bankA buying the gold would burn the used and tattered bank notes locally (yet crediting BankB with X amount). and bank B would receive freshly printed bank notes straight from the mint. as for the gold. well places like fortknox kept the gold and simply said bankB use to own this pallet of gold in this corner of the room. now bankA is the owner of the pallet... the gold never really physicaly moved (unless requested due to international trade)

that was back in the days of gold-backed notes, and the days that customers received nice fresh, crisp bank notes.

so imagine the world where people keep and manage their daily life stuff themselves on smart phone apps. and either hoard the larger amounts in coldstored hardwallets, or put it into a savings/investment accounts that was fully secure and most importantly, insured.

if you ignore the present day to day FIAT palm passing between customer and bank, and just see a bank as a place where people put funds in to securely hold (investment/savings banking) you will get the idea that 1 bank does not have to convince other banks. as they are independant.

as for the day to day customer-bank 'money' movements. well why would anyone use a bank when they can easily use an app that is only filled up with daily spend amounts, just to pay for bills and a few luxury lifestyle stuff.

banks are not seeing bitcoin for the daily spend activities of customers, as that can be self managed by the customer and the bank can just get rid of their highstreet/mainstreet buildings. saving money. and purely concentrate on the investment/savings banking side. this is because the daily spend activities of customers LOSES the banks profit, it doesnt MAKE profit.

but the investment/savings side, this is where banks still make their profits (as thats where the true profit and purpose of a bank is) and it would ofcourse chain react to cause FIAT/bank notes (small daily spend) to become useless. which will start the era of the crypto-currency take over, where fiat is not needed.

so the key to getting bitcoin mainstream and possibly getting rid of FIAT would be easier if you convince banks of the positives bitcoin can bring them.

[Ron~Popeil]

Bit coin backed currency would be a really innovative and probably low cost alternative for sure. Banks or credit unions in the US could opt out of the federal reserve system altogether if they chose to. There would be some regulatory hurdles, but the idea is a good one.   

[franky1]

Bit coin backed currency would be a really innovative and probably low cost alternative for sure. Banks or credit unions in the US could opt out of the federal reserve system altogether if they chose to. There would be some regulatory hurdles, but the idea is a good one.   

think about it. the world debt is not bank debt (in bankers eyes) its government debt. so by simply not using it they can be free of it.

imagine it this way. imagine the world relied on... carrots.. banks would warehouse the carrots on behalf of government(farmers). but now the carrot farmers are in debt and everyone is screaming at farmers that there are no carrots around..

well the warehouse company(bank) realises soon their warehouses will be empty with no carrots inside leaving them with useless warehouses that make no money but have hundreds of people with pitchforks smashing their windows and staff sitting in their chairs doing nothing. Thus they might think its time to get into the vitamin pill(bitcoin) market and store vitamin pills, and never touch a carrot again. after all vitamin pills dont decay.

[Beliathon]

In one sentence:

"If you don't adapt to the new form of money, you will be out of business inside two decades. Your call."

[franky1]

In one sentence:

"If you don't adapt to the new form of money, you will be out of business inside two decades. Your call."

well thats a simple approach, that sounds not incentivising, but more hostile. thus i think its best we list the POSITIVES

[Mobius]

Bit coin backed currency would be a really innovative and probably low cost alternative for sure. Banks or credit unions in the US could opt out of the federal reserve system altogether if they chose to. There would be some regulatory hurdles, but the idea is a good one.   

If they were to opt out of the federal reserve system they would likely not qualify for their FDIC insurance and would likely have a run on the bank. The FED at the bank level is really not very expensive considering it's security.

[Beliathon]

In one sentence:

"If you don't adapt to the new form of money, you will be out of business inside two decades. Your call."

well thats a simple approach, that sounds not incentivising, but more hostile. thus i think its best we list the POSITIVES

Why wouldn't I be hostile to those corrupt, greedy pieces of shit?

[NapoleonBonaparte]

I really don't think that banks "hate" bitcoin, but rather they partly do not understand it. If they do not understand something then they will likely not want anything to do with it. This is simple business and is not anything against bitcoin per say.

Another reason banks try to "avoid" bitcoin is due to AML issues. There are a lot of traders who use their personal bank accounts for business purposes, and they transact huge amounts of dollars into and out of their account. Most of these traders are likely not following MSB requirements even though they should be. Banks need to perform some level of due diligence regarding this and it is very hard to do so.

I think once Obama leaves office (and the regularity environment gets much better), banks will likely be much more accepting of bitcoin.

I agree AML are probably the main issues for wider and faster worldwide usage.

Some mining suppliers/traders are already finding a way around this and move their operation to a friendlier country.

[franky1]

In one sentence:

"If you don't adapt to the new form of money, you will be out of business inside two decades. Your call."

well thats a simple approach, that sounds not incentivising, but more hostile. thus i think its best we list the POSITIVES

Why wouldn't I be hostile to those corrupt, greedy pieces of shit?

1. i know their greedy but swearing at them wont make fiat dominance disapear
2. throwing rocks at them will just make the barrier of entry into bitcoin worse
3. getting them to accept bitcoin and teaching them how to make REAL unmanipulated profit,
4. having banking services that are insured as oppose to basement dwellers uninsured, unsecured exchanges is a good thing
5. with bankers on your side the regulations will be eased off and any business/person can easily move between currencies
6. once we get the barrier of entry lowered. then throw the stones at the centralised lot.

[jaberwock]

1) their hedge funders and brokers can still play the markets in their comfy leather chairs and continue to get their bonuses

They can do already with regular markets, why change when you are winning?

2) they can shut brick and mortar banks as they wont need customer walk-in's, thus saving on building costs/maintenance per town

Internet banking had the same effect, so with cash machines. But there are things that still need to be made in-person, and people that for some reason still pay to the cashier, so buildings still will need to exist.

3) they can reduce staff numbers EG low level security/customer counter staff meaning a huge expenditure saving

Same as internet banks/ATMs/etc

4) no need to produce plastic cards and mail them out, saving a few dollars per customer

No excuse to send plastic and mail them out, and charge a fee much greater than the cost to make and send them

5) no need to produce paper bank statements and mail them out, saving a few dollars per customer

Don't mail your credit card billing is already an option, but most people don't use it.

6) hoarding customers funds for a year, will make them profits without even having to play the markets

You supposing the BTC value will always increase year after yeat,. This is a risky assumption. More risky than the banks are willing to take.

7)....(you fill in the blanks)

7)No one wants to change a game that have rules rigged to make they ring, and banks are no different.

[Baitty]

I might raise up some of these points to the bank that I use I can't see them taking any notice when they see the word bitcoin and will probably not read the email but its worth a try so I'll write up a email tonight.

[zedicus]

I really don't think that banks "hate" bitcoin, but rather they partly do not understand it. If they do not understand something then they will likely not want anything to do with it. This is simple business and is not anything against bitcoin per say.

Another reason banks try to "avoid" bitcoin is due to AML issues. There are a lot of traders who use their personal bank accounts for business purposes, and they transact huge amounts of dollars into and out of their account. Most of these traders are likely not following MSB requirements even though they should be. Banks need to perform some level of due diligence regarding this and it is very hard to do so.

I think once Obama leaves office (and the regularity environment gets much better), banks will likely be much more accepting of bitcoin.

I agree AML are probably the main issues for wider and faster worldwide usage.

Some mining suppliers/traders are already finding a way around this and move their operation to a friendlier country.

It is not that easy to move your operations to another country. It costs a lot of money to break your lease and bring your employees and equipment to a distant country. You have the same issue for traders as they have many reasons to stay where they are.