I've seen a few threads around this but many are old and I didn't want to necrobump them.
When you talk about starting a bank many give up before even fully looking into it.
There's actually a lot good pieces of news in the area:
1) A full banking license actually can cost as little a ~$2m. If you base out of the right place it's very doable.
However, putting banks aside...
2) You can pay your £/$/€ fiat wage directly into a credit union. You can also pay your bills directly too.
3) A credit union can easily issue debit cards but that's not essential
How do you think Bitcoin fits into the picture bearing in mind the work going on with the likes of Grassroots Banking movements?
I could imagine a Union which:
- allows you to adjust how much of your balance you wish to keep capitalised or to invest - and unlike banks it's upfront about it! Fees cover the capitalisation
- links with various exchanges seemlessly (goldmoney, various Bitcoin exchanges)
- facilitates currency exchange directly between members (like Zopa)
- links with other exchanges globally using Bitcoin
- issues a Debit card with a QR code on one side but usable in a normal ATM machine!
- automatically converts a % of your wages to a credit based currency such as precious metals or Bitcoin, optionally even transfers these funds abroad
Just how many of these processes you want in one basket is another matter. Obviously something too useful for capital flight and successful would be persecuted by the banks but,
this surely is a business ripe for development!
Already this is possible separately but it's clunky - the mean thing is that you just need cheap transfers from Union to the exchange. That's the key, cheap transfers. If you're in the Eurozone then that means SEPA.
Also, a credit union can potentially be as bad as a bank. There needs to be a union with strict controls on capitalization or it's just a bank by another name! You could even have limits on what can be deposited.
The other problem of course is the fees. If you are keeping a well capitalized balance sheet then you're not investing funds elsewhere to pay for the fees. What are the overheads for running a credit union? I heard it can be <$20,000 to start in the UK, but what about ongoing fees? I would have seen this as a big thing before- people don't see the fees in banks until the funds disappear. However, now is a time when people are waking up to this.
The whole thing could be non profit and tax exempt, kick started with crowdsource funding.
I think any credit union needs to be careful when associating with Bitcoin. Ideally you'd want to have these things as 3rd party services but aiding automation.
Also, I don't like the name "Credit Union". Personally I'm looking for just a bank with reduced involvement in credit and debt that has brought so many countries to their knees!
I couldn't find a credit union that is 100% capitalised. I guess it would have to be 99% just to stay within the definition. For now the only 100% capitalised store for fiat other than cash is a bank in the Cook Islands; no cheap transfers.