As the first bank in Liechtenstein to allow cryptocurrency investing through their platform, Bank Frick has made a momentous decision in the world of cryptocurrency trading. Many banks have classified cryptocurrencies as a speculative investment and not one they want to be involved in, for example, in India and Brazil, but Bank Frick has changed the tides here.
The goal for this European bank is to position themselves as a forward-thinking bank that can make significant changes while still abiding by the regulatory framework.
Bank Frick has previously been active in allowing crypto-based products, but this move removes one more intermediary, so it is just the banks in between the cryptocurrency and the investors. Originally, they were the first bank in Liechtenstein to allow for basket investing in cryptocurrencies, in partnership with Bitcoin Suisse.
These baskets have experienced significant gains in the meantime, but Bank Frick is still quick to say that investors should be cautious with speculative investments. The bank’s services are currently in demand all across Europe, and this will strengthen as their adoption of cryptocurrencies catches on. In words of Hubert Buchel, the Chief Client Officer:
“This is because they know that we can offer them reliable support in implementing their business models with cryptocurrencies and blockchains in line with the existing regulatory framework.”
The service will allow the purchase of the five most popular cryptocurrencies; bitcoin (BTC), bitcoin cash (BCH), litecoin (LTC), ripple (XRP), and ether (ETH). Users will benefit from the ease-of-mind that comes from knowing there are strong protections in place against hackers and theft. Bank Frick is regulated much more tightly than any online trading platform is, which means an added level of security.
Helps to Increase Convenience of Investing
In the last few years, the goal of bitcoin, and most cryptocurrencies, has most been to spread their reach to as many people as possible. For the coin to succeed on any large scale, it needs to reach adoption by a population outside of the small fringe group that currently invests in bitcoin.
One of the key setbacks to investing in bitcoin is the perceived difficulty in buying it. Although platforms like Coinbase have done a great job of making it easier to purchase the cryptocurrencies, there are still concerns over storage, and the anti-money laundering laws in place do a lot to foment this anxiety.
So with financial institutions like Bank Frick making it easier to purchase cryptocurrency, lack of convenience can no longer be an objection. The bank’s end goal is to make it as easy to bank with cryptocurrencies as it is to bank with fiat currencies. This forward-thinking model is a great hedge against any changes which could occur in the world of economics over the next few decades.
Can Cold Storage Be Centralized?
The obvious objection to the expansion into digital assets and offering cold storage is that the whole point of cryptocurrencies is directly in contrast to the function of banks.
Cryptocurrencies were designed to be a hedge against any failure that could occur within banks. Their overall goal is to create decentralized currencies rather than have a centralized power like the Federal Reserve be in charge of money. Knowing this, it doesn’t make sense to have a bank be the custodian of the cryptocurrencies.
At the same time, this sort of widespread use of bitcoin and other cryptocurrencies is exactly what is necessary to better the entire system. There are trade-offs, but in the long-run, it will be good for the future of cryptocurrency.