WHEN WILL WE SEE A BITCOIN BANK?

It’s only a matter of time before we will see bitcoin, or some digital currency variation be adopted by traditional

micah willbrand
Micah Wllbrand, Director of Risk & Payments EMEA at BankersAccuity

It’s only a matter of time before we will see bitcoin, or some digital currency variation be adopted by traditional finance firms. There is the definitive headline risk, such as money laundering, that it associated with bitcoins. However, where there is money to be made, you can be assured that there are financial companies there looking for ways to leverage the opportunity. Personally, some sort of ‘ripple’ like debt based currency seems to be the most likely fit for financial firms (wrote a bit about this in a post for Forex Magnates).

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On the topic, Micah Wllbrand, Director of Risk & Payments EMEA at BankersAccuity has released an opinion post “When Will We See a Bitcoin Bank?” Micah is of the opinion that a bitcoin bank will be established by a non “institutionalized country” that is looking to raise their profile or create a parallel system for their current financial system.

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With the recent activity this past month with Mt. Gox, Liberty Reserve and others, it comes to light that the Achilles heel of bitcoin is the foreign exchange requirement to exchange national currencies to bitcoin and vice versa. This dependency on traditional banking processes is where national governments will continue to target the bitcoin economy despite the “digital dollars” being outside central currency controls.

But with so much money being tied up in bitcoin, it is only inevitable that some country somewhere will open a bitcoin bank. It is unlikely that any institutionalized country will do this – such as the US, UK, or Japan. But what about countries which sit on the outside of the global financial systems? The countries which often are associated with bleeding edge internet technologies. Countries with stable governments and economies in places like Vanuatu or Maldives – with their own financial regulatory authority and currencies which want to want to raise the profiles of their countries; or maybe somewhere with unstable currencies and limited financial infrastructure – such as Sudan or Ethiopia. Time will only tell, but it is not inconceivable to believe that the world will see a fully regulated bank within the next few years. The stakes, and the money, are just too high.

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