Banks Offer Secure Vaults for Cryptocurrencies

Bank Vaults Cryptocurrency

The need for the secure storage of money and other things of value dates back to the Ancient Egyptians in 3,000 BC, and the methods of storing valuables has been evolving ever since.  From the secure storage of grains and gold in Rome to the storage of Federal Reserve Notes at US Mints, the safe storage of items is critical in maintaining stability and security within an economy.

Recent news of exchange hacks have plagued the cryptocurrency community and have struck fear into the hearts of those holding coins on exchanges.  In the past month, two major cryptocurrency exchanges have been the victims of hacks with losses totaling in the hundreds of millions.  Although the victims of the $500,000,000 Coincheck hack had a portion of their losses refunded to them, the victims of the more recent (and far more controversial) Bitgrail hack were not as fortunate.  These are just a few of many exchange hacks, and highlight the need for secure, private, and easily accessible, storage for cryptocurrency.

One of the first banks to offer a “vault” for all types of cryptocurrencies is a Canadian bank called VersaBank. David Taylor, VersaBank’s CEO, claims that the cryptocurrencies will be completely secure and private, and the clients will be the only ones able to view the contents of the safe.  Although individuals can purchase secure wallets like a Trezor or a Nano Ledger, large hedge funds will require more cohesive storage for millions, or billions, of dollars' worth of cryptocurrencies.  "Our differentiator in this market is to be secure and super private," said David Taylor, “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."

Shinhan Bank in South Korea has announced similar plans to build a crypto vault, with large hedge funds as its target clientele.  Both banks have claimed that the services will be very expensive.

In the midst of large world banks banning crypto purchases with debit and credit cards, the banking industry as a whole clearly has a negative stance on this rapidly growing industry.  That being said, larger banks may follow suit if the crypto vaults end up being a highly profitable business, and this could contribute to a shift in big banking’s sentiment towards cryptocurrencies.