Standard Bank has begun piloting a current-account linked bitcoin wallet developed by South African outfit Switchless.
Speaking at Finovate Europe, Switchless co-founder Marcus Swanepoel said that his firm's technology enables Standard Bank account holders to buy bitcoin with their sovereign currency account and store it in the secure wallet.
The wallet is currently only being tested by a small pilot group inside Standard Bank and there has been no decision made yet on whether to roll it out to the public.
The version demonstrated at Finovate lets users buy, sell and save bitcoins from within the Standard Bank online banking portal. Online banking credentials are used to verify the identity of the bitcoin wallet holders.
Other features shown off by Switchless include a merchant plugin which allows online retailers to accept bitcoin as payment for goods.
This is very bold of Standard Bank. They'd have to offer it as an investment product with full disclosure on risk. And how do they ensure that the wallet does not EVER receive funds from the bitcoin exchange? There's no guarantee of counterparty ID At all.....
At this point in time, it is probably MORE likely than not, that there are laundering (tax evasion) or criminal proceeds of crime (drug sales) attached to bitcoins than cash. They say crime uses 30% of the cash in an economy, but it stays black the rest
of the market is realitively clean. If you buy bitcoin with Rand, who knows who you've just aided and abetted in placement. This is a direct conduit into Standard Bank. Eeek.
Any system has bad actors and good actors. When the good actors out number the bad, it becomes more difficult to discredit the system. Is the internet discredited by pornographers and paediphiles ? Is the credit card system discredited by frequent fraud
and theft of credit card information (the fact that such data needs to be provided in order to effect a transaction being it's supreme flaw) ? Is the entire banking system discredited by a certain global bank recently fined $2billion for money laundering
for South American drig cartels and thereby being indirectly linked to the untimely death of 80,000 people ?
CompetitiveNew York City, NY (USA)
© Finextra Research 2015