Proposing a progressive banking model, envision a financial institution that seamlessly combines traditional services with the unique features of cryptocurrencies, particularly Bitcoin. The core tenets include offering transparent custodial services, backed by visible reserves, and extending the bank's reach into the realm of cryptocurrency mining. By employing a mining company as a continuous source of Bitcoin inflow, the bank aims to facilitate efficient lending to businesses, akin to conventional banking practices.
In this model, businesses borrow Bitcoin, and the market determines fair lending interest rates, with the bank charging a premium to borrowers. The bank ensures a balance of wins and losses by judiciously managing its lending portfolio. In the event of default, Bitcoin lent to a failed business is replenished through the mining operation.
Crucially, the bank commits to guaranteeing returns, provided it refrains from lending more than its existing mining reserve. Transparency is paramount, with customers able to verify reserves easily through the decentralized ledger. This innovative approach seeks to compel customers to choose this bank, bridging the worlds of traditional banking and decentralized finance.
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