VersaBank, an original fully-digitized Canadian bank, is offering a new-era deposit facility for consumers’ digital assets. Billing itself as “Canada’s fintech engine,” VersaBank terms the offering a “blockchain-based digital safety deposit box” for bitcoin and other virtual currencies.
Blockchain Is Secure, but VersaBank Is Airtight
A former lead at BlackBerry cybersecurity, Gurpreet Sahota, has been appointed as Chief Architect on VersaBank’s new offering. Sahota will manage a group of developers working on the blockchain-based safe deposit facility. The Schedule 1 chartered bank is aiming for a June 2018 rollout. In their online pitch, VersaBank labels coins as “digital assets [that] are just as valuable as any family jewelry, property deed or stock certificate.”
The bank hopes to fill a need for the same level of protection (largely against hackers in the case of crypto assets) as typically provided for physical assets, but maintains that protecting digital assets “isn’t nearly as simple.” After January 2018’s Japan incident, where the national cryptocurrency exchange Coincheck reported to financial authorities its loss of 500 million NEM, VersaBank’s release is well timed.
Far and away the most noteworthy cryptocurrency theft in history, the Coincheck loss added to persistent concerns about the human element contaminating blockchain security. The extrapolated dollar value of the NEM theft was around $400 million.
“No storage device or commercial cloud service is completely safe, and most blockchain-based secure storage is only for cryptocurrency,” said a spokesperson, continuing: “[It is] offered by companies you’ve never heard of.”
As VersaBank has always been an all-digital offer, the new vault service is a logical extension of their banking model and is focused on global application. Pointing to the fact that physical assets like gold bars and government bonds are often locked away in preferred countries such as Hong Kong, Switzerland, and others, VersaBank hopes to carry the tradition of securing one’s assets over into the digitized 21st century.
Drawing attention to its history and trustworthiness, VersaBank’s VersaVault will essentially be a personal Fort Knox, with only clients ever gaining access to their deposit box. CEO and current President, David Taylor, has a strong focus on the VersaVault as a logical extension of the bank’s original embodiment of being purely digital and tech-savvy.
When appraised as a whole, it’s clear that the bank is positioning itself as a key player in Canada becoming the world’s digital asset storehouse.
“We’re using what banks are all about — safety and security — only what we’re doing now is saying that physical box in the basement is getting obsolete,” Taylor explained. Speaking in Toronto, he added that:
“Most people’s really valuable assets are contained in some sort of digital format, whether it be a deed or a contract or a cryptocurrency.”
Emulating the famous Swiss stance of absolute discretion and bomb-proof security, he said that “Our differentiator in this market is to be secure and super private. The bank wouldn’t have any kind of back door to open up the vault, we’re just providing the facility that folks could put their digital keys in.”
Taylor added that since their press release, some large financial institutions had expressed interest in entrusting VersaVault with their digital assets.
He also indicated that while a pricing structure had not yet been hammered out, it wouldn’t be cheap. VersaBank is not alone in this arena. Other firms in Canada, USA, and Asia, are touting similar offers. None have the credibility of VersaBank when it comes to digital transacting, however; The London, Ontario outfit boasts enviable statistics at the moment. Observers view the bank’s latest announcement as an opportunity for the bank to enable even more rapid growth in size over the short term.
Digital Vaults to Emerge as Coin Thefts Set to Continue
The Shinhan Bank of South Korea announced in November 2017 that is was launching a Bitcoin vault facility too. Various technical firms outside of the banking fraternity have also pitched a secure vault solution to coin holders.
Before that, in September 2017, an established Toronto safety deposit bank, Goldmoney Inc. added Bitcoin storage to its secure facilities that are available in seven countries around the world. VersaBank has a market valuation of approximately $126 million, around 80 employees, and owns roughly $1.36 billion in assets.
Although seen as a tiny bank in comparison to others in Canada and North America, VersaBank has outperformed other local big banks. Shares rose 24 percent so far in 2018, a dramatic difference when compared to the S&P/TSX Commercial Banks Index that declined 2.9 percent.
Other banks to provide specialized cryptocurrency asset handling include Switzerland’s Falcon Bank and Vontobel. Germany and Liechtenstein also feature, with Fidor Bank and Bank Frick respectively – all of them being comparatively small banking institutions. According to Edi Wögerer, CEO of Bank Frick, larger banks were afraid of cryptocurrencies. “They don’t understand them,” the CEO said. “They feel threatened.”
Unperturbed, Wögerer appeared ready to make the most of the new market opportunity. “There are risks involved but there are also really big opportunities,” he expressed optimistically. “We know what to do from a security perspective, so this is a big opportunity for banks like us.”