Canadian branchless lender VersaBank is planning to launch a blockchain-based vault to store digital assets, such as cryptocurrencies. To begin with, the Ontario-based chartered bank announced that its subsidiary VersaVault will offer its services to major institutional players. In this regard, Versabank has signed two memorandums of understanding with a cryptocurrency exchange and a cryptocurrency-based fund.
However, VersaBank refused to divulge details of the cryptocurrency exchange and cryptocurrency-based fund. According to VersaBank, the blockchain-based vault works like a safety deposit box, where only the user has access or knows what is inside, but its contents are protected from hackers and other risks.
According to David Taylor, VersaBank’s president and chief executive, the two institutional holders of cryptocurrencies will offer suggestions that will guide the development of VersaVault, which it intends to launch globally.
Commenting on the agreement, Taylor said
“We have two guinea pigs basically, two folks that have agreed to work with us, to make sure that as we develop the interface that its exactly what they want.”
The main reason for planning to open a blockchain based vault is the Coincheck hacking incident in which the Japanese exchange lost about $533 million worth NEM (XEM) tokens to hackers.
According to Taylor, the Coincheck hacking incident was the “big impetus” for VersaVault.
Taylor further added
“Obviously, the value of those (crypto)currencies have been increasing dramatically, and it’s been attracting the attention of the modern-day bank robbers, modern-day thieves that have been finding their way into these wallets.”
The VersaVault will also enable users to store other digital assets such as sensitive photographs and contracts. By the end of June, VersaBank intends to have a functional prototype that’s functional for their two institutional partners. Taylor revealed that VersaBank will expand its client base to five or six exchanges and a few funds in over a year.
Taylor also refused to give details regarding the storage location and the manner in which the assets will be stored. However, he said that the digital assets would be stored in multiple locations.
Taylor stated that VersaBank is not a traditional financial institution. Therefore, users need not be worried of dealing with a bank. VersaBank, which largely operates online, has 100,000 clients with deposits and 200,000 clients with lending projects. The bank has $1.80 billion in assets, a figure relatively smaller than banking giants in the Europe and North America. However, the relatively smaller size makes it easier to adapt to technologies quickly.
In the aftermath of the 2008 financial crisis, a majority of common people are fed up with the manner in which banks and major financial institutions continue to put the world economy in trouble with their selfish goals.
“I’m sure there are a fair number of purists in the world, that will say ‘Hell with it, I’m not dealing with those banksters. But we are a really different kind of bank.”