The SEC has repealed SAB 121, opening the door for banks to custody #Bitcoin. While this sounds like progress, the risk of fractional reserves & rehypothecation could spell disaster.
Congress must act NOW to protect BTC’s integrity.
Full read here: https://egodeath.capital/blog/too-big-to-fail-banks-amp-bitcoin-custody
Hyper-"Mintification" is near.
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I'm on the fence here.
On the one hand I hate the idea of BTC rehypothecation, but I also think it is just inevitable. You can't fix the system from within the system.
The only way to "fix" this is to have them blow themselves up, and lose the actual BTC. The incentives to do this are just too big, for them not to abuse their position.
On the other hand.. the criminal thing in this scenario is that they're losing other people's BTC. Not theirs. Given that they have no way to print it, this would probably harm the customer most of all.
Which brings me back to my earlier comment; you can't fix the system from within the system. What we really want here, is for the customer to be much more self reliable, or at least make very strict demands when having a bank hold the BTC. Neither of these are likely to happen on a really big scale right now, because our current system is the result of good times. Good times create weak men.
Isn't the only real path forward here pain? A lot of pain?
Could spell disaster for fucking morons who want a bank to custody their bitcoin. I hope they do fractionally reserve and rehypothecate. I look forward to learning how I can earn 20% on my bitcoin by lending it to Citibank.
Gtfoh
Banks be like, gonna get me some BTC and fractionalize that shit.
REKT
AGAIN
