Dear Banks, Please Store Our Crypto Coins
Not often that banks are the knight in shining armor. Now’s the time for them to shine. Their traditional income streams are running dry, they’re in dire need of new income streams — and keep on ignoring cryptocurrencies. If not offering cryptocurrency trading, why not at least offer cryptocurrency wallets?!
Crypto exchanges have come a long way since Mt. Gox. Take CoinPayment’s handling of their recent XRP theft. The exchange displays a surprising amount of responsibility and accountability. This is new and an encouraging sign of a maturing market, distancing itself from the Wild West heydays.
Most people however still don’t trust exchanges and swear by private cold storage. Now, ahead of the potential Bitcoin fork, Bitcoin holders are even asked to withdraw their holdings from exchanges, or the tokens might just disappear.
Fair enough. But would you ever store your cash in your private cold drawer? That’s what banks are here for, right. To keep your dollars, euros, pounds, whatever, safe.
That opens up an opportunity for traditional banks. We already trust them with your life savings, so we we’ll likely trust them with your cryptocurrency holdings. It’s a no-brainer.
Yet for whatever reasons, cryptocurrencies are still looked down upon by the traditional finance industry. This in a time and age when the crypto market capitalization tripled from March 2017’s $30 billion to June’s $110 billion. And this is just the beginning.
Right, banks would have to invest in new solutions and probably offer some kind of interest on crypto holdings, but they’d also reap immense benefits.
Banks would become part of the cryptocurrency ecosystem that’s quickly becoming a new global market for assets, similar to stocks, bonds, mutual funds and central bank-issued currencies.
Banks storing crypto assets — ideally even trading them — would help address these pain points:
- People trust banks, which in turn enhances trust in an inevitably increasingly regulated cryptocurrency market.
- Traditional banks are a thing of the past. Thinking ahead by embracing cryptocurrencies which one day might become more popular than government-backed currencies opens up new income streams for banks and keeps them relevant.
- Embracing cryptocurrencies helps banks stay ahead of fintech and other digital trends, including customer big data monitoring their investment and spending patterns.
- Being part of the crypto ecosystem can help shape the future of regulations. Even if many wish differently, there’s no way around regulation.
- Bank holdings couldn’t just disappear. Hell breaks loose if a bank “looses” fiat or gold holdings. Same applies to eventual crypto holdings. Those assets are backed.
It’s time for banks to act.
Called my bank the other day and asked starry-eyed whether their online trading system lets me buy cryptocurrencies. The young voice at the other end didn’t even understand the term “cryptocurrencies.”
Solving this real problem would not only enhance the banks’ tarnished reputation.
Storing digital tokens in a bank account would help spread cryptocurrencies like wildfire.