Coinbase, Glint or your Local Bank?


2020 was a year that few predicted and the first weeks of 2021 have ramped up the uncertainty even further. Civil unrest, questionable financial policy and a global economic slowdown have elevated the need for stability. Historically, people would turn to precious metals to protect them for the fluctuation of fiat currencies. In today's digital world, cryptocurrencies have emerged to compete with gold as the hedge against inflation.


Until recently you needed to work with a third party to access precious metals or crypto. You could go to Goldline, buy gold and have coins or bullion delivered to your home. Download the Coinbase app, link a bank account and purchase Bitcoin for your crypto wallet. But soon you will have more traditional options to participate in these markets.


Glint allows you to purchase gold and to spend your holdings with a linked Mastercard debit card. It is not a gold "coin" or cryptocurrency, but it has the convenience and ease of use that is expected with modern financial solutions. As the Glint website describes: "For every dollar held in your Glint account, Sutton Bank holds an equivalent amount in their reserve. For every ounce of gold held in your account there is an ounce of physical gold owned by you in the vault in Switzerland. There is no token, fund or bank that sits in between you and ownership of your money."

Find out more here.


Coinbase has been around since 2012 and has over 35 million users. The service allows people in over 100 countries to to buy, sell, store, use and earn cryptocurrency. While primarily for personal use, Coinbase has expanded to businesses and now enables them to accept price-stable cryptocurrency such at USD coin and DAI.


Both Glint and Coinbase are available today and companies like them are receiving most of the coverage as gold and Bitcoin are surging. At the time of publishing this post, Bitcoin is slightly off it's all time high of $41,986.17 and gold is down few hundred from it's 1 year high of $2010.10/ounce. These numbers make for great headlines.


However, the most significant development has gone relatively unnoticed. The OCC released an interpretive letter on September 21,2020 that allows national banks and federal savings associations to hold "reserves" on behalf of customers who issue stablecoins, in situations where the coins are held in hosted wallets.


"National banks and federal savings associations currently engage in stablecoin-related activities involving billions of dollars each day," Acting Comptroller of the Currency Brian P. Brooks said. "This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner."

View letter here.


This position by the OCC in effect legitimized cryptocurrency and will result in further expansion. What this means for decentralized crypto like Bitcoin and LiteCoin is uncertain. Will you be able to buy and sell crypto at you local bank branch or be able to send Bitcoin to loved ones through your banking app? What this means for the personal user is still to be determined and traditional banks are rarely on the cutting edge. However it appears to be the first step to prepare financial institutions for a centralized FedCoin or other stable coins issued by central banks around the world.


On a personal basis, investing some of your money with Coinbase or Glint seem like an exciting opportunity. But as a payments professional, the biggest impact for you may have been quietly rolled out with little fanfare in the last quarter of 2020. Should be an interesting year!

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