They Were Wrong About Bitcoin
US Banks Can Now Hold Bitcoin And Other Crypto
A few hours ago, the Office of the Comptroller of the Currency (OCC) of the United States announced that national banks have the authority to provide fiduciary bank accounts and cryptocurrency custody services to cryptocurrency companies and/or natural persons who opt for these. In a practical sense, this announcement means that the OCC opens the doors for all financial institutions to adopt a different alternative. They even explain the difference between holding fiat money (FIAT) and Bitcoin, for example, noting that the latter exists only on the Blockchain network, there will be no physical possession of it.
“From safe deposit boxes to virtual vaults, we must ensure that banks can meet the financial service needs of their customers today,” said Brian Brooks.
But being honest, it is not the only difference, not even the one mentioned is relevant, the difference between Bitcoin and the Dollar bill or any fiat currency is the ability to preserve value and not be controlled by some bureaucratic craving and less by a demented economist Keynesian at the head of a central bank. This, obviously, they don’t say, but they know it. And they cannot do anything, the debt of the United States has already reached a historical record and there is still talk of continuing the rescue and implementing the UBI (Universal Basic Income), socialism to appease the masses … And the consequences?
But as I wrote in detail earlier, nothing positive comes from applying expansive monetary policies and it seems that it became a fashion around the world.
Returning to the topic of the OCC announcement, this event as such shows the intention of the United States Government not to be left behind with technological progress, it is the smartest thing they did since decriminalizing the purchase of Gold. Some clueless refuse to accept that cryptocurrencies, especially Bitcoin, are natural financial assets, created by the very nature of need and the market.
The letter also reaffirms the OCC’s position that national banks can provide permitted banking services to any legal business, including cryptocurrency businesses, as long as they effectively manage risks and comply with applicable law. Of course, this could be a long-term problem if those regulations are used as an excuse to increase bureaucratic control over cryptocurrency companies.
The vast majority of cryptocurrency businesses and exchanges rely heavily on bank rails for customers to finance their accounts with fiat to exchange for cryptocurrencies. However, cryptocurrency companies have long struggled to find banking partners due to cryptocurrency's “high-risk” nature. In 2017 JPMorgan CEO Jamie Dimon even tagged bitcoin a “fraud,” but now JP Morgan banks top cryptocurrency companies, including Gemini and Coinbase. Pretty hypocritical of the controversial Jamie Dimon.
Some others, like Warren Buffet, called Bitcoin, the criminals’ currency, although there is evidence that cryptocurrency is not actually used more frequently for money laundering or illicit crimes than fiat currency, and many banks have already implemented compliance and legal barriers for cryptocurrency banking companies. Silvergate Bank, for example, was one of the first banks to provide fiat bank accounts to major cryptocurrency companies and exchanges. Cryptocurrency companies have attempted to maintain multiple banking relationships to diversify the risk of losing an account.
Of course, the fault that Warren Buffet has lost almost 35% of the value of his portfolio is not a punishment, it is because he refused to buy Gold and Bitcoin, opting for airlines in danger of bankruptcy. Virtually your entire portfolio relies on government bailouts or Wall Street manipulation, you should take advice from Paul Tudor Jones and stop being a leech.
And contrary to what he thinks, Bitcoin is truly the best thing to combat money laundering and illicit activity.
“Every cryptocurrency transaction is recorded in a public ledger, making it inherently transparent. This allows us to quantify how much of all cryptocurrency activity is associated with crime … That simply is not possible with cash and other traditional forms of value transfer. ”
-Jonathan Levin
This is only the beginning of the awakening for the financial world, the OCC letter serves to generate confidence and in this situation of the financial crisis, it is what is most needed.
Stay safe. Manage your risk and get comfortable in the chaos.
