Banking Services

[PatrickHarnett]

Thought I would start a new thread for this topic rather than placing on page six of Starfish BCB.  What I'm looking for is feedback and ideas because while I am very good at some things, I am less good at dreaming up ideas and working out what the community wants. 

Starfish BCB provides some pretty basic services.  It runs deposit accounts, provides PPT if people really want it, does lending and financing.  Pretty simple - money in and money out.  It is a little unusual as it appears to be one of the few "banks" that is still active on both sides without relying on BS&T and that was a deliberate decision from January.

Most people also know that I have a BS&T account from 2011, have invested in many GLBSE companies, some non-GLBSE companies and do the occasional trading arbitrage on my own account.

I have also (as informal services) acted as escrow on a reasonably sized transaction, provided a non-domiciled purchase for someone, and also provided approx USD$10k for someone that needed a quick international payment while Gox was holding their funds (needless to say - trusted client).  I have also been asked to provide lines of credit (overdraft) facilities and underwriting for different ventures.  However, currently these tend to be one-off, favours or for some other reason. 

So, for the creative types, what actual banking services would you like to see?  To start you off, here's a few things I actually think would work (with a bit of implementation effort or possibly huge angst):
1: A BTC virtual credit/debit card - essentially an online line of credit that you could draw on and then make payments off the balance (and no, I don't necessarily need to know how it works yet)
2: FX payments - not sure if the major exchanges are handling this really well or not, and I'd probably get caught up in the AML stuff quite quickly.  But there are some stiff margins charged by conventional banks around the world.

so

3: What else drives you crazy in bitcoin land that would be valuable.


Other important things.
1: If I'm extending credit or transferring cash these are not anonymous service offerings I'm talking about, so if you think this is for hiding below some radar forget it - I need to know who I'm dealing with and too bad if you don't like it.  (deposits are less onerous)
2: Currently I have been doing this as an individual.  I can put it all under a properly regulated company structure if required (I have a spare one already) if customers would prefer that.
3: All this stuff takes time and effort.  Services are not free, and that's why I take a margin between loans and deposits.
4: I might have a reasonable amount tied up in bitcoin land, but I know there are people with much more invested than I have.  I don't need to be swamped by someone wanting to shift 100,000BTC from A to B ten times a day when that would defeat the point of providing services to a range of people.

[alatus]

I think doing the proper FX integration of bitcoin would be THE thing!
It would provide the community with a core possibility to grow.

Argument:
I am considering to open a BTC exchange in Easter-Europe, and I am faced with the problem:
1. If I do a kind of "ECN" style exchange -like Gox does- I will have near zero liquidity at sell side, since miners are rare and even they don't sell the coins for our instabile fiat. Demand is great,  but supply...
2. If I think of a "bucketshop" like solution, whwre I represent the sell side and lateron clear the trade at Gox, I have the fees and hurdle that keeps people from buying when I clear the trades with frequent international transfers. If I would have an FX style opportunity to buy btc with fiat, my situation would be much easier.

The modell is not elaborate, but just wanted to show the need...

[exahash]

4: I might have a reasonable amount tied up in bitcoin land, but I know there are people with much more invested than I have.  I don't need to be swamped by someone wanting to shift 100,000BTC from A to B ten times a day when that would defeat the point of providing services to a range of people.

Can you please elaborate on that?  Are you saying you don't want large accounts?  Or a lot of transactions?  It's not clear to me.

[finkleshnorts]

Even though I have yet to use Starfish BCB, it really is one of the most professional and exemplary bitcoin services out there. I'm an unabashed fan.

[vite]

reloadable visa or mc debit would be nice. with the oportunity to fund it with both bitcoins and regular currency. I don't mind having to provide AML, cause that would serve to prove I exist and give your business legitimacy that you are dealing with real people.

As for the debit card, when funding with bitcoins, would be doing it at some percentage of the current exchange or something. I know US Federal permits foreigners living abroad to have this prepaid cards and even have a bank account. As long as they provide Identifying information the most importan part is that the debit card once btc has been converted in US dolars does not yield interest cause then it would be a headache with the IRS.

My two cents

BTC

[PatrickHarnett]

4: I might have a reasonable amount tied up in bitcoin land, but I know there are people with much more invested than I have.  I don't need to be swamped by someone wanting to shift 100,000BTC from A to B ten times a day when that would defeat the point of providing services to a range of people.

Can you please elaborate on that?  Are you saying you don't want large accounts?  Or a lot of transactions?  It's not clear to me.

If you look at some of the larger holdings, there are many (enough) people with 20k+ that they have tied up in single places (like trading on Gox or in BS&T) so total individual holdings would be much larger.

If I am to provide a sensible service to a sufficiently wide range of people, then holding very large accounts could dominate available resources to the detriment of the wider community.  Also, having a larger number of accounts and transactions helps with the risk and diversity which is why a conventional bank with 100,000 accounts can carry such low operating liquidity.

As an example, for Starfish, there are currently 30 active deposit accounts and over the last month I have returned eight as people have chosen to reinvest or sell coins with the price rise.  Balancing the on-call nature of deposits and the fixed term nature of loans goes straight to the level of float required (and inactive coins).  Having a lot of smaller accounts helps, and conversely a few large ones doesn't.

Putting it another way, I would simply be uncomfortable having $1M tied up in bitcoins and being exposed to someone for $100k.

Prompted by comments, I'm going to trial 1BTC minimum deposits.

[PatrickHarnett]

I have a thread in "securities" where I raise the issue of credit ratings.  I have also had a discussion with one of my larger depositors today about credit ratings/trust levels on the various deposit takers.

I was able to provide a few suggestions of where he could park some coins as I was comfortable adding 1000 to his current account but he still had some additional ones to park.  What was obvious is that he had a view on different people and how secure the different schemes might be.  Having mulled this idea over for quite a while, and acknowledging that I will probably be seen as competition, I am opening this up for some additional feedback:

1: Deposit takers and issuers of fixed rate bonds could apply for a credit rating.  This would require various metrics like assets/liabilities, length of time in business, verification of identity/location etc.  If information doesn't get divulged, that weakens the score.  Information would not be made public.
Probably a simple AA/A/B/C range will be sufficient, perhaps with a "+" or "-"  To obtain a rating would involve a fee (thinking of 10BTC currently) as this helps separate the more serious from the less serious people and the object is to provide confidence for people and their coins.
These rating would be published on the "Who pays what" thread.

2: Depositors could also request a summary of basic information.  People do this currently by reading the threads for the chosen scheme.  However, this doesn't contain the basic disclosure you would expect if you're handing over a bunch of coins to someone on the other side of the world.  So, for 1BTC you could get a report with some basic metrics to help decide if XYZ-bank is worth the risk of a few percent return on your hard earned coins.  (undecided if it would be 1BTC per company or a summary table of all deposit takers).

[CecilNiosaki]

I have a thread in "securities" where I raise the issue of credit ratings.  I have also had a discussion with one of my larger depositors today about credit ratings/trust levels on the various deposit takers.

I was able to provide a few suggestions of where he could park some coins as I was comfortable adding 1000 to his current account but he still had some additional ones to park.  What was obvious is that he had a view on different people and how secure the different schemes might be.  Having mulled this idea over for quite a while, and acknowledging that I will probably be seen as competition, I am opening this up for some additional feedback:

1: Deposit takers and issuers of fixed rate bonds could apply for a credit rating.  This would require various metrics like assets/liabilities, length of time in business, verification of identity/location etc.  If information doesn't get divulged, that weakens the score.  Information would not be made public.
Probably a simple AA/A/B/C range will be sufficient, perhaps with a "+" or "-"  To obtain a rating would involve a fee (thinking of 10BTC currently) as this helps separate the more serious from the less serious people and the object is to provide confidence for people and their coins.
These rating would be published on the "Who pays what" thread.

2: Depositors could also request a summary of basic information.  People do this currently by reading the threads for the chosen scheme.  However, this doesn't contain the basic disclosure you would expect if you're handing over a bunch of coins to someone on the other side of the world.  So, for 1BTC you could get a report with some basic metrics to help decide if XYZ-bank is worth the risk of a few percent return on your hard earned coins.  (undecided if it would be 1BTC per company or a summary table of all deposit takers).

I see nothing wrong with this, and I was developing a similar system for my use. I think that having people pay a fee to obtain a rating shows who is really serious about getting involved in the lending community, and that is a must. However, instead of paying 1BTC for a report, how feasible would it be to have a monthly fee on a website with up-to-date information instead?

Alternatively, I would also like to see loan applicants applying to obtain a credit rating as well.

[Bitcoin Oz]

What I would like to see is a credit union for bitcoin.

This is different to a bank in that the people with deposits are members and it doesnt have shareholders. The difference is that all of the profits of a credit union go to those members not just to the shareholders.

Edit: The cu loans out just like a normal bank. Many people dont have the skills to safely lend out coins but Patrick does and with hundreds or thousands of members the risk and reward can be spread out. Also if you let people specify if they want their deposits (or part of them) used for lending out it would be sweet

[Bitcoin Oz]

I have a thread in "securities" where I raise the issue of credit ratings.  I have also had a discussion with one of my larger depositors today about credit ratings/trust levels on the various deposit takers.

I was able to provide a few suggestions of where he could park some coins as I was comfortable adding 1000 to his current account but he still had some additional ones to park.  What was obvious is that he had a view on different people and how secure the different schemes might be.  Having mulled this idea over for quite a while, and acknowledging that I will probably be seen as competition, I am opening this up for some additional feedback:

1: Deposit takers and issuers of fixed rate bonds could apply for a credit rating.  This would require various metrics like assets/liabilities, length of time in business, verification of identity/location etc.  If information doesn't get divulged, that weakens the score.  Information would not be made public.
Probably a simple AA/A/B/C range will be sufficient, perhaps with a "+" or "-"  To obtain a rating would involve a fee (thinking of 10BTC currently) as this helps separate the more serious from the less serious people and the object is to provide confidence for people and their coins.
These rating would be published on the "Who pays what" thread.

2: Depositors could also request a summary of basic information.  People do this currently by reading the threads for the chosen scheme.  However, this doesn't contain the basic disclosure you would expect if you're handing over a bunch of coins to someone on the other side of the world.  So, for 1BTC you could get a report with some basic metrics to help decide if XYZ-bank is worth the risk of a few percent return on your hard earned coins.  (undecided if it would be 1BTC per company or a summary table of all deposit takers).

I bet Nefario would integrate this into glbse