Thursday, July 23, 2020

Bullish or anti-bitcoiner? Community reacts to banks guarding cryptocurrencies

Key facts:
There are those who believe that this adds a new adoption option for cryptocurrencies.
For some, the use of banks violates the principles on which 
cryptocurrencies are based.

The community around cryptocurrencies reacts with mixed visions before the approval of the Office of the Comptroller of the Currency (OCC), an institution that regulates banks in the United States, for these banking entities to offer cryptocurrency custody service.

Through various messages on social networks and blog posts, cryptocurrency users have expressed their positions on this news. The two poles of appreciation on this fact are divided between those who consider an advance in favor of mass adoption and a bullish market catalyst, while others reluctantly see banks engaging in the custody of assets that were born with decentralization as premise.

For Peter Van Valkenburgh, director of research at Coin Center, this case shows similarities of cryptocurrencies to cash. In a blog post, the researcher noted, "It would be foolish to imagine a future in which each person stores their life savings directly in a purse that they personally control."

Van Valkenburgh considered that "there will always be a need to guard large amounts [of money]." And that's where the banking services come in. This position coincides with the justification of the OCC, whose comptroller Brian Brooks assured that the banks should have the possibility of satisfying the needs to safeguard the assets of their clients. "Now for tens of millions of Americans, they include cryptocurrencies," Brooks added, as reported by CryptoNews on July 22.

Also on Reddit, one of the most active networks among bitcoiners, there have been many comments on this topic. In the r / bitcoin subreddit, we can find questions such as that of the user Kibu98, for whom "the idea of bitcoin is not to depend on a third party and get rid of banks, not to work with banks and be regulated".

The same user considered that it is possible that this new tool from banks could boost adoption, but insisted that this would occur to the detriment of Bitcoin's reason for being. What was the main reason why Bitcoin was created? Not to trust a bank or government, but now we fail and we are happy with that, ”he said.

Banks guarding cryptocurrencies, but how?

Others, like mrmishmashmix, considered that this does not contravene Bitcoin in any way, in addition to evaluating as inevitable that those who wish to put their funds in the custody of banks. "Permission is not required to send or receive bitcoins and that means that saints, sinners and everyone else can use it," he wrote on Reddit.

Among the responses to Kibu98, user CrunchitizeMeCaptn proposed a different scenario. According to him, he could be willing to put his cold purse under the cover of a bank, in a vault, but he would not hand over control of his private keys to any entity.

It would be waiting for the first banks to start offering crypto custody to see under what conditions they would do so, however. At the moment, the OCC only ensures that these custody services could be offered by banks.

The conclusion they reached at the institution comes after having previously become interested in the subject. As this newspaper reported last June, the US banking regulator even opened a public consultation on regulation for cryptocurrencies.