Will 100% Bitcoin (BTC) backed banks emerge?

Will 100% Bitcoin (BTC) backed banks emerge?


14. November 2020

On October 31, 2008, Satoshi Nakamoto published the famous document that will give birth a few months later to Bitcoin (BTC). Since then, the cryptocurrency environment has become much more democratic with the development of multiple platforms such as Coinbase, Binance or Kraken. Today more than ever, financial services (centralized and decentralized) seem to develop well, and augur a trivialization of exchanges. Will we see 100% Bitcoin-backed banks appear in the near future?

A gradual evolution and acceptance of cryptocurrencies

By certain legal relaxations, the involvement of institutional investors, and even of certain States, cryptocurrencies are more and more accepted in the economic environment.

In France already, since the Pacte law of 2019 , crypto-assets have acquired a legal framework and the status of providers of digital services has been created. Société Générale, through its subsidiary Forge, was thus able to issue 100 million euros of bonds rated AAA by Moody’s and Fitch through the Ethereum blockchain .

For its part, JP Morgan has launched its own blockchain and its own token, the JPM Coin and we could multiply the examples with the Singaporean bank DBS which is launching its own exchange , with the state of Wyoming, in the United States, which approves the status of crypto-bank for the exchange kraken and the Avanti group or with the ECB which has launched a vast online consultation on the use of the digital euro .

Bitcoin, the ultimate store of value instrument?

Bitcoin, a store of value? Even though its price is the most volatile on the foreign exchange markets? This may seem somewhat surprising. Still, it may well turn out that the mother of cryptocurrencies has all the attributes that made gold a global benchmark, and more.

First, the limit of 21 million units is a guarantee of confidence, even though gold was given a finite stock in the short term, the quantity of bitcoins tends towards a fixed value .

Then, and even despite certain jurisdictions , cryptocurrency is not a national currency, but rather a currency with a universal vocation , that is to say that its value does not depend on legal tender, but rather on its appreciation in the currency market.

Finally, where gold required transport costs and transit time, dematerialization is a major advantage since it responds to this double problem, namely lower transaction costs and ease of transport.

Thus, these combined elements help to make Bitcoin a pure store of value as envisioned by Satoshi Nakamoto .