When you are investing in Cryptocurrencies, you may usually not think of big banks being there to help you along the way. Still, there have been some cases that seem to have indicated interest on the part of large-scale financial institutions in getting directly involved in the Crypto market.
Today, Coindesk publicized the existence of a patent that is held by Bank of America, which indicates their aim of being a custodian for Crypto accounts in the future. The first caveat to this is it is not clear when Bank of America plans to act on this patent. Secondly, it is not entirely evident if they plan to just hold Crypto funds or do anything else with them in the future.
Whatever the case, in this respect, Coindesk suggests that Bank of America is looking capitalize on the need for an aggregated enterprise account that can securely hold all sorts of Cryptocurrencies in one place, at a large scale. With this claim, however, comes the logical question: is trusting a bank with the Crypto that your business takes in, secure?
Those who advocate for complete decentralization of financial services would immediately say no to this. Those who are more in the middle on this issue, might simply exercise caution.
In the end, the most logical way to tell if a bank acting as your Crypto custodian is safe is simply to do a very specific kind of research. In a word, it would be best to find all public information that is available on their offering and compare it with the same sort of information on decentralized offerings. Another way of thinking about this is to ask yourself: which do I trust more? Do I trust a banking model in which one, insured entity backs my Crypto or do I trust a decentralized model in which I completely own my Crypto? One could even take this to a third option and say, what is best is a Crypto business like Coinbase, that could become a bank.
Of course, all of this is somewhat of an over-simplification of a complex situation, but it is at least a starting point for any business considering one of these types of services. Over the long term, only time and the continued success of Crypto-backed businesses will determine if Bank of America and others like it, move into this area at all.
By: BGN Editorial Staff