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I've been in Bitcoin for a little over five years now, and I still remember reading early on in this world about Bitcoiners claiming without batting an eyelid that central banks would one day hold Bitcoin as a reserve asset on their balance sheet.
At the time, many people thought these Bitcoiners were fantasists or even crazy. It all depended on your level of awareness of the extraordinary power of the Bitcoin revolution at the time.
Today, in late October 2021, a top U.S. bank regulator has just said that U.S. officials are looking at how to set a clearer path for U.S. banks and their customers who seek to hold Bitcoin and cryptocurrencies. The goal is to keep control of these new and rapidly developing assets.
Private banks may be allowed to hold Bitcoin on their balance sheet in the future
The news appeared in Reuters and it was Jelena McWilliams, who chairs the Federal Deposit Insurance Corporation, who said this during an interview.
It seems that a realization of the inevitability of Bitcoin is underway among the powerful people at the head of the current monetary and financial system in America:
“I think that we need to allow banks in this space, while appropriately managing and mitigating risk. If we don't bring this activity inside the banks, it is going to develop outside of the banks. ... The federal regulators won't be able to regulate it.”
As I already explained at the end of 2020, the success of Bitcoin is inevitable now. I am not the only one who realizes this. All Bitcoiners are aware of this, but also more and more institutional players.
Since the summer of 2020, American banks have been given the green light by the OCC (Office of the Comptroller of the Currency) to provide services in Bitcoin to their customers. Most of the major American banks are now doing so. Even JPMorgan, whose CEO Jamie Dimon has always displayed his aversion to Bitcoin, has jumped on board to avoid being left behind.
Because we're talking about avoiding being outdated here.
The world is changing, and authorities are beginning to realize that they need to embrace the Bitcoin revolution to avoid being left behind
The world is evolving, and those who refuse to evolve by adapting to the new world that is taking shape for the future will end up being overtaken. While Jelena McWilliams recognizes the challenges, she feels that private banks will sooner or later have to be able to hold Bitcoin directly on their balance sheet:
“At some point in time, we're going to tackle how and under what circumstances banks can hold them on their balance sheet.”
The green light to hold Bitcoin on their balance sheet will be given to private banks in America sooner or later. It is only a matter of time. Once the American banks get the green light, private banks in other countries will ask for the same right.
It won't be long before this movement spreads around the world.
Mind you, I am not saying that this is a good thing from the point of view of the Bitcoin revolution. Indeed, Bitcoin is there to free us from these intermediaries. But if these private banks come and buy Bitcoin, then we will fall back into the same traps as in the current system.
Unless you buy Bitcoin directly and keep the private keys in your possession. This will allow you to have total power over your wealth, even if the banks hold Bitcoin.
The world is changing, and authorities are beginning to realize that they need to embrace the Bitcoin revolution to avoid being left behind
As private banks increase their Bitcoin reserves on their balance sheets, it is obvious that some central banks will find it appropriate to switch some of their reserves to digital gold. Again, once a central bank of a major economic power starts this movement, the others will quickly follow so as not to be left behind.
We're not there yet, but everything seems to be written for Bitcoin in the years to come.
When that happens, because I think it will happen faster than we can imagine, then we will have to remember and pay tribute to, those Bitcoiners who already saw this coming in the mid-2010s.
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