A Toronto-based branchless bank has decided they want to solve the problem of crypto wallet theft. VersaBank, a relatively small, almost exclusively online bank has announced that they will be launching a digital safety deposit box, VersaVault.
VersaVault has signed on to work with one crypto exchange and one crypto fund. The two unnamed entities will serve as test subjects, as VersaVault gets its product bug free. VersaBank will also use feedback from these two groups to improve the interface and development of VersaVault.
VersaBank defines their new product as a digital lockbox, in which only its owner knows what is stored. Much like traditional lockboxes, they are managed by the bank, but the contents are not directly available to the bank. VersaBank has not disclosed the means by which their new product will operate but has optimistic views on the subject.
The vaults will be blockchain-based, and information will be stored in numerous locations. In addition to holding assets like cryptocurrency, the boxes will be able to hold sensitive digital documents, photos, and contracts. VersaBank hopes to sign a few more crypto-related businesses to their project by the end of the year.
The impetus for creating a more secure system.
VersaBank decided to tackle this issue after big scams, like the Coinbase hack, cost investors millions of dollars. VersaBank CEO David Taylor calls the perpetrators of these scams “modern-day bank robbers.”
He realizes that if consumers and criminals are taking a step into the future of how money is transferred, and stolen, then banks need to get their heads into the game of asset security. The rise of cryptocurrency values has created a real need for better security in the community.
VersaBank will have a prototype of their crime solution by the end of June. After that, the product will be marketed to hopefully expand to five or six big bank clients by the end of the year.
Doesn’t this backtrack us to centralized banking?
The product that VersaBank is offering sounds great, on some levels. From another angle, it seems to conflict with the basic tenet of cryptocurrency: decentralization. Relying on a bank to store cryptocurrency seems counter-intuitive, given that Satoshi Nakamoto specifically launched Bitcoin in reaction to the loss of faith in traditional banking resultant from the 2008 global financial crisis.
Transactions via Bitcoin gave users anonymity and sidestepped traditional reliance on a central banking system. The system was a theoretical breath of fresh air for many who had lost out big when the traditional markets crashed.
