The storage of Bitcoin has long been an affair in and of itself.
Just think about that story of the man who threw away his hard drive with thousands of coins on it, now worth dozens of millions of dollars, or the recent story of cryptocurrency skeptic and libertarian investor Peter Schiff losing $2,000 worth of BTC due to a password issue that was his own fault.
Long story short, for most users, especially the non-technically adept, storing BTC securely isn’t friendly.
My #Bitcoin mystery is solved. I mistook my pin for my password. When Blockchain updated their app I got logged out. I tired logging back in using my pin, which was the only "password" I had ever known or used. I also never had a copy of my seed phrase. Honest but costly mistake!
— Peter Schiff (@PeterSchiff) January 23, 2020
But this may soon change, in Hawaii anyway.
Hawaiian Banks May Soon Hold Your Bitcoin, Hopefully(?)
Four Democratic senators and a Republican senator last week introduced Senate bill 2594, which has passed first reading.
The bill will make it legal for Hawaiian banks to store digital assets, which is a class that includes “virtual currencies,” “digital securities,” and “open blockchain tokens.”
The wording in this bill strongly implies Bitcoin, Ethereum, and other open/decentralized coins will be able to be stored by banks should the bill pass, which could mark a strong step forward in the Bitcoin security game for average Joes and Jills.
Notably, just because this bill was fired doesn’t mean that banks in Hawaii will jump on the Bitcoin bandwagon, but it can be presumed that the lawmakers that filed the bill are responding to some demand.
Hawaiian banks may not be the only mainstream institutions soon offering crypto-asset custody.
The passing of new legislation in Germany’s parliament will purportedly make it easier for German banks to sell and store digital assets. Also, a Reuters report in December citing people familiar with the matter revealed that large Dutch bank ING is working on a crypto custody project.
Banks and other centralized institutions holding cryptocurrency would go against the trustless and anti-bank premise of something like Bitcoin and Ethereum, which are blockchains that both promote heavy decentralization, but it could help increase the adoption of digital assets.
Lawmakers Warming to Crypto
This isn’t the only potential legislation that has crypto bulls buzzing in the U.S.
U.S. House Representatives DelBene, Schweikert, Soto, and Emmer introduced the Virtual Currency Tax Fairness Act of 2020.
The bill, should it become law, would solve a primary issue in spending cryptocurrency for day-to-day transactions: smaller transactions of crypto-to-fiat would not be subject to potential capital gains taxes that chip away at the wealth of Bitcoin holders.
The Act will ensure that cryptocurrency transactions where the gains made by an individual would be under $200 will be exempt from capital gains taxes, effectively allow Bitcoin purchasers to buy almost any everyday item — from lunch to toilet paper to coffee — without having to deal with the IRS.
That’s not all. There are people in U.S. politics that are overt fans of Bitcoin, who could champion the bill if it comes across the desks.
Kelly Loeffler, the former CEO of Bakkt, was recently sworn in as a Senator, seemingly making her the first crypto industry exec to have such a large political role in the U.S.
Not Everyone Is a Fan
While there are these crypto proponents on the Hill, there are some strong opponents of the technology also in Washington.
Most notably, President Donald Trump himself. Trump wrote in a Twitter thread published in July of 2019 that he’s “not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.” Trump cited these assets’ potential to “facilitate unlawful behavior.”
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
There’s also been some strong pushback against Libra in Congress, with one Congressman claiming that the cryptocurrency project could be as detrimental to the U.S. as the 9/11 attacks.