Switzerland To Open Bitcoin Bank As Crypto "Fort Knox" Relocates To Zurich

Tyler Durden's picture

With every DM central bank hell-bent on ensuring that the currencies which roll off their printing presses will become ever more worthless with each passing iteration of the global debt monetization ponzi scheme, and with calls growing louder to ban hard currency altogether in an effort to remove the effective lower bound and thus make it possible for bureaucrats to centrally plan every aspect of the economy right down to the micromanagement of people’s spending habits, we suppose now is as good a time as any to make the switch to a medium of exchange not controlled by the Keynesian cabal and where better to go "crypto" than Switzerland which, according to Handelszeitung, is set to open its first Bitcoin bank. 

Here’s the story (via Google translate):

Switzerland's financial center is likely to be rich in the near future to one facet. Currently, preparations are underway for the establishment of the first Bitcoin Bank. The reportedly from multiple sources in the financial sector. Corresponding discussions with the Financial Market Supervisory Authority are to take place in these days. To date, there is in Switzerland no bank that offers services with the new digital currency Bitcoin.

 

The initiators of the project confirmed the facts: "The application for a banking license, we will submit in the next few weeks," says Guido Rudolphi. The IT specialist is one of a group of eight people, which are behind the planned establishment of the financial institution. «First investors are on board, and it runs the search for suitable premises." To which company is which ultimately applied for a banking license, did Rudolphi competitive reasons forequarters not say...

 

From traditional institutions they first distinguished by the intended clientele. For future customers include about companies that generate income and revenues in Bitcoin and at the same time require access to the traditional banking system. These are examples Bitcoin exchanges, Bitcoin broker, pay providers and software platforms on which the new digital currencies play a role. Until now such companies - although based in Switzerland - the most costly detour via foreign banks go.

There you have it. No longer will Swiss Bitcoin brokers, exchanges, and providers be forced to take a "costly detour via foreign banks," but can instead transact right at home and thus help to create and facilitate what we imagine will be an especially effective tax avoidance system involving the potent combination of Swiss banks and a currency that many people still do not fully understand. 

And then there's this:

In London, UBS now officially been experimenting with the Bitcoin technology. And in New York analyzed the Nasdaq to handle stock transactions of IPO candidates on the Bitcoin network.

We suppose the only remaining question is: how quickly will UBS set about rigging Bitcoin just as they have every other currency on the face of the planet? 

But don't worry, because our friends at the CFTC are on top of it

From Commissioner Mark Wetjen:

"I believe what might precipitate more serious consideration of the issue is if someone from the market were attempting to manipulate the bitcoin cash market to benefit a position that they have in a bitcoin-derivative position. CFTC staff would be responsible for investigating and determining whether that activity constitutes a violation of the CEA.”

With the CFTC on the job, what could possibly go wrong?

*  *  *

Meanwhile, in related news, Xapo is relocating to Zurich:

For the past year, Xapo has focused on building its infrastructure to offer the most secure bitcoin storage service available. Deemed the Fort Knox of bitcoin, we’ve set a new standard in bitcoin security and treasury management to become a global and trusted provider and the leading custodian of institutionally held bitcoin in the world.

 

To better support and accelerate this focus we are moving our headquarters to the global financial center of Zurich, Switzerland. Our primary deep cold storage vault is also located in Switzerland, and at the request of our expanding global customer base, now is the time to bring our center of operations closer to the heart of our security infrastructure. The country’s regulatory stability, international neutrality and its deep-seated tradition in global finance also factored into the decision. We will retain a small presence in Palo Alto, California to serve our U.S. customers.

 

While it should be unimaginable that major institutions would hold millions of dollars in cash, many corporations today still follow an analogous practice with respect to bitcoin by using insecure storage techniques like paper wallets or printed key backups.

 

By contrast, our fiduciaries are protected by our vault, which uses private keys that never touch the client or the internet and are buried deep within geographically dispersed, heavily guarded locations with multi-signature technology for transaction signing. We have customized security protocols to reduce the likelihood of theft through social engineering, phishing or brute force hacks, and offer full insurance in the unlikely event that these systems are compromised.

 

Bitcoin’s ability to scale hinges on consumer confidence and the development of services that allow people and institutions to easily and securely store and transact in bitcoin, and that’s where our product, partnerships and team will continue to be focused. We look forward to continuing to serve our growing global customer base from our new global home in Switzerland.

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SpiOpsChiwowwow's picture

Brilliant!

I thought banks were the Bitcoin enemy? Mysteriously, now they join forces.

I'll keep my metal, thank you.

Xibalba's picture

BTC will make you a small fortune!

All you have to do is start with a large one first!

Captain Debtcrash's picture
Captain Debtcrash (not verified) Xibalba May 27, 2015 2:36 PM

I’m certainly not like the anti gold bugs saying that the proper allocation to bitcoin is zero.  I can see a small allocation, but in light of some of the information there is out there, I certainly don’t trust it, and any money put into it you should expect to lose.

If the supporters are right and it take over commerce (very long shot), even a .1-.5% allocation should be plenty. 

http://www.debtcrash.report/entry/bitcoin-an-e-dollar-beta-test

Condition 1SQ's picture

If you lose your private keys, you're toast!  The absolute finality of transactions and the possibility of losing a fortune due to an IT mishap should make people wary when using this technology.

commander gruze?'s picture

Just keep your private keys printed on encrypted paper wallet, in multiple backup copies. You'll be just fine. I couldn't imagine why anyone would need a bank to hold bitcoin. But I can totally understand that bank is what it takes for other banks, funds, and trusts, to get into bitcoin business. They will be obsoleted in 10 years anyway.

Waylon Bits's picture
Waylon Bits (not verified) commander gruze? May 27, 2015 3:14 PM

OMFG!! BUH BITCOINZ!!!!!!!!!!!!!!!!

https://localbitcoins.com

Waylon Bits's picture
Waylon Bits (not verified) ShorTed May 27, 2015 3:17 PM

fonestar is above you!  and fonestar is below you!

0b1knob's picture

How can a Bitcoin be in Switzerland when it's really not physically anywhere at all?

commander gruze?'s picture

It's about the jusristiction and nothing else.

0b1knob's picture

The whole point of Bitcoin is that it is supposed to exist outside the legal structure of any government.   If Bitcoins can be cancelled by ANY country then it is just another fiat scam.

MonetaryApostate's picture

I guess some people have forgotten that true riches doesn't lay in fiat nor digital currency, but rather your ability to "Invent money"....

Morbid's picture

both gold and bitcoin have a place under the sun ahead of changes soon.

Paveway IV's picture

And neither one should have any place in the vaults of the Gnomes of Zurich.

Ask the Brits how that turned out for them in the 60's...

jonytk's picture

Bitcoins no, the place you trade or store them, sure you can trade on a starbucks and store them on your phone but most people use websites. Websites may be subject to jurisdictional issues.

Condition 1SQ's picture

"Encrypted paper wallet" .. you mean the private key in either plaintext form or QR code?  That is the key to the castle.  If you're talking about one wrapped with another layer of password protection, fine, but you're either going to have to write that one down or trust yourself to remember it.

crazytechnician's picture

Your toast if you lose your cash or PM's , and unlike cash you can make multiple encrypted backups of your private keys and store them in multiple geographical locations.

Waylon Bits's picture
Waylon Bits (not verified) crazytechnician May 27, 2015 3:17 PM

Yes, it is good to join the Key Party.

Bunga Bunga's picture

yeah, that little boating accident. And you couldn't make backup copies of your cash & PMs.

Waylon Bits's picture
Waylon Bits (not verified) Condition 1SQ May 27, 2015 3:18 PM

If you are not comfortable backing up files and storing them safely, then no... no Bitcoin is not for vous!

Szabotoshi Nickamoto's picture

If you lose your physical metals you're toast! The absolute finality of precous metal transactions and the possibility of losing a fortune due to a real life loss or theft should make people wary when using precious metals.

What you're saying isn't incorrect, but there's no need to let it scare you off either.

Condition 1SQ's picture

Silly.  Just see what happens when you lose that little USB stick or piece of paper with your encrypted wallet.

Paveway IV's picture

"...Just see what happens when you lose that little USB stick or piece of paper with your encrypted wallet..."

That's not necessary or even the most significant risk. Ask yourself how you're going to buy food when they hit the kill switch on the internet (or certain segments of it) for whatever reason.

There's plenty of ways to make your digital currency useless as a medium of exchange for an extended length of time without you actually LOOSING any of it. Little comfort for someone that needs to buy water for their urban family dying of dehydration (no municipal water) if addresses, signatures and block chains are inaccessable for three weeks. Their family will be dead in two. It's a little late to move out to the country near some water, and several million other people will have the exact same idea. Good luck with that.

Impossible? What if your unfortunate enough to live in a NORTHCOM Waffen SS designated 'hostile' state and they want to prevent terrorist activity by shutting down all the internet connections and municipal services for a month? Technically possible? Well, it's damn sure possible with a few Hellfires and a drone.

Any form of Bitcoin assumes the government is willing to LET you use it for transactions. Sure, alternative networks will eventually be arranged or 'illegal' access might be available. But if you can't find either option in two weeks, you better have plenty of pretty daughters because "My bitcoin is good - I promise" isn't going to get you any water. 

JustUsChickensHere's picture

And all those problems apply to the electronic version of national fiat currency these days as well.

 

The paper version of national fiat?  Probably ok for tiny transactions, milk and bread.  But banned or confiscated these days in the west for any 'large' amount ....  >1000 Euro in some places

 

PM's have some of these problems too in the USA, not so much in the far east.

 

ALL currency systems are subject to risks, and the attention of bad actors. Bitcoin (like PM's) can sidestep banks.... as long as you accept the caveats that go along with choosing to annoy the bank mafia.

Waylon Bits's picture
Waylon Bits (not verified) Captain Debtcrash May 27, 2015 3:19 PM

You do not need a lottaBitcoin to make rich you just need a lilBitcoin to make rich.

pods's picture

Makes me chuckle to see a reeded edge bitcoin.  

Pladizow's picture

To avoid BitClipping!

commander gruze?'s picture

If you can't delegalize, out-regulate, out-litigate, and out-innovate bitcoin, the only sensible course of action to take is to join bitcoin. Many have seen that comming.

Waylon Bits's picture
Waylon Bits (not verified) commander gruze? May 27, 2015 3:21 PM

Correct gruze.  You will join Satoshi or you will be annihilated.

 

https://btc-e.com

Condition 1SQ's picture

Hey RUGAY2!  Looks like they finally banned you.

Anasteus's picture

That's positive, they have been eventually forced to accept the cryptocurrency. The funny thing is that bitcoin inherently doesn't need any bank to function properly. Quite the opposite, any such relation would just jeopardize otherwise smooth bitcoin manipulation and transactions. This all charade pursues just one goal; to trick the people into opening their personal bitcoin wallets within the banking sector much like traditional accounts. I can even imagine how this will be promoted, by earning extra yields in fiat for those opening 'their' wallets in the bank.

I'm not afraid about derivative bitcoin games as long as standard exchange from-to personal wallets are effective (and, fortunately, nothing and nobody can principally avoid it; anyone can open some at any time). If, furthermore, the derivative gamble would be settled in fiat, it would just be what it's always been, a scam not related to the currency itself. At worst, bitcoin will leave the weak hands.

The concept is laughable and the 'hidden' plan unveiled. It can only influence fools who will never have enough courage to enter bitcoin. And if eventually so, it'll be too late.

The most important message from the article is the banks' recognition that they definitely lost the war against bitcoin.

Condition 1SQ's picture

Oh how wrong you are, they are setting it up for a gigantic plunge.  The sheeple will adopt whatever currency the oligarchy decides upon.  It will not be Bitcoin.

crazytechnician's picture

Can I please borrow your Crystal Ball , I need to go and buy this friday's winning lottery ticket.

Waylon Bits's picture
Waylon Bits (not verified) Xibalba May 27, 2015 3:30 PM

Bitcoin has been remarkably stable at $200 - $240 an ounce over the last few months.  We are gearing up for the next move higher.... after the Grexit (or Brexit) we will see $10,000 BTC.

Bunga Bunga's picture

... and not to forget negative rates, bail ins, cash ban. There is a lot in the pipeline coming to any town. 

Waylon Bits's picture
Waylon Bits (not verified) Pladizow May 27, 2015 3:22 PM

A whole new we!  A brand new cryptosy feeling!

HonkyShogun's picture
HonkyShogun (not verified) SpiOpsChiwowwow May 27, 2015 2:29 PM

In other news, Israel asks for more money to bomb Palis from their sugar daddy; the US:

http://www.globalresearch.ca/israel-wants-50-increase-in-us-provided-mil...

pods's picture

If it takes longer to explain it than to wipe my ass, it will NEVER become an actual currency.

"You see you have this blockchain here..."

"These letter and number thingies?"

"Yep, that is how you know this is the only........."

"I'll just have some more krugs, thank you very much."

pods

Skateboarder's picture

You need to be a computer nerd in order to use bitcoin, and a stupid one at that.

crazytechnician's picture

In 1997 it was a similar story

"You need to be a computer nerd in order to use that internet, and a stupid one at that"

pods's picture

Ummm, not exactly.  

The internet is a luxury.

BTC is supposedly a currency, correct?

A currency that is dependent upon electricity and networks and faith in the same?

Might as well call them Star Credits.

But go ahead, there still is oil, use that oil to generate electricity, to turn around and burn it up by "mining" some "Star Credits."

Mark my words, people will be fucking EATING each other before BTC becomes anything other than a novelty or long ball "investment."

pods

commander gruze?'s picture

Wrong on many account.

BTC is not a currency. It's a very specific type of network - not necessarily a computer network. It's a distributed consensus network. Currency is an application of that network.

Bitcoin network is all but dependent upon faith. In fact, trust is replaced in bitcoin with computationally provable math. You don't have to trust it, just verify it works by computing Merkle root, block hash, transaction script, chain height, etc.

Mining you mistook as a measure for producing BTCs. It does that too, but the goal of mining is to secure the network, and BTC is just a reward.

Bitcoin is alreay useful to avoid extortion fees by the likes of Western Union. It is also used as automatic notary service. First attempts at building contract resolution platforms are already there, too.

crazytechnician's picture

That is about 80 points above his IQ score. You need to explain bitcoin slooowly to these Flat Earther Doomer Preppers. Imagine you are trying to explain it to somebody who is mentally retarded , that way you may get somewhere.

pods's picture

Wow, that's a good one.

Sorry, I looked into BTC.  It doesn't pass the smell test.

And everytime there is some problem brought up, it is never about the technology.  It is always dismissed as someone being a scammer, etc.

But what good is a fantastic, Satoshi inducing (that is a complete release of all the body's store of dopamine) crypto CURRENCY if it is that easy for people to scam you out of it, or for it to be seized, or stolen.

At least with us Flat Earthers, you physically have to steal any valuables we may or may not have.

I may be a retard, but at least I can see when a dog won't hunt.

pods

commander gruze?'s picture

No need to be this harsh. Distributed consensus was not possible prior to bitcoin and this stuff is inherently hard for humans. All western civilization relies on building hierarchies rather than networks. Plus, only now we have sufficient technology to see blockchain based systems in operation. I think it was Nick Szabo who estimated that distributed computer is 10,000 times slower than centralized one, but it can actually be trusted for the trust now can be operationalized as computation and verified at all times.