When bitcoin (BTC) was at $0.30, Hal Finney wrote in December 2010, “there is a very good reason for bitcoin-backed banks to exist.”
Quick-forward 14 years, and Michael Saylor introduced that his MicroStrategy (MSTR) “endgame is to be the leading bitcoin bank.”
Outranked solely by Satoshi Nakamoto, Blackrock’s IBIT ETF, and vanishingly few different holders of bitcoin (BTC), Saylor’s firm holds 3% of the circulating provide in its $65 billion treasury.
Given the scale of his asset base, Saylor has a market-leading skill to fractionalize its reserve for a considerable inhabitants of potential banking prospects.
For context, MicroStrategy’s treasury is roughly equal to the deposit base of banks like Comerica or Santander — and it plans to proceed rising its dimension.
‘Very good reason for bitcoin-backed banks to exist’
In 2010, Finney was engaged on co-creating the Bitcoin community with a small variety of cypherpunks, together with months of non-public discussions with Satoshi Nakamoto.
As the worth began to exceed a $1 million market capitalization for the primary time, Finney began to put in writing predictions about its potential to disrupt all the monetary system.
In Finney’s view, posted to the BitcoinTalk discussion board, BTC-backed banks usually are not solely inevitable however will problem “their own digital cash currency, redeemable for bitcoins.”
Furthermore, service as a financial institution reserve might be “the ultimate fate of bitcoin,” Finney wrote. BTC will serve “as a reserve currency for banks that issue their own digital cash” in Finney’s multi-cryptocurrency imaginative and prescient.
Removed from a complement to on-chain transactions, Finney concluded that interbank settlement will turn into the first goal of BTC. “Most bitcoin transactions will occur between banks, to settle net transfers.”
That is precisely what Saylor is planning to construct. Particularly, MicroStrategy plans to turn into a service provider financial institution holding over $100 billion price of BTC, backing a wide range of monetary merchandise.
Non-cyberspace banking for the our on-line world financial institution
Complementing BTC itself, which Saylor describes as “a bank in cyberspace, run by incorruptible software,” MicroStrategy may supply non-cyberspace merchandise like brick-and-mortar areas, playing cards, checks, tellers, brokers, and mortgage paperwork.
So far, there aren’t any US banks that maintain BTC as a major reserve asset, and regulation is partly accountable.
New laws, such because the advanced-stage GENIUS Act invoice, may ease the flexibility of banks to leverage BTC as a reserve asset for an preliminary class of digital money choices like USD-pegged stablecoins.
Critically, the US Federal Reserve will even must ease the flexibility of banking grasp account holders to qualify and quantify BTC values for in a single day reserves.
Regardless of these obstacles, Saylor thinks that he’ll ultimately have the ability to flip his firm — or one among its divisions — into a correct financial institution. If he’s capable of accomplish this imaginative and prescient, it may full one of many earliest predictions of BTC visionary Hal Finney.
