Vast Bank's Strategic Decision to Leave the Cryptocurrency Market
Vast Bank, a financial institution based in Oklahoma, United States, has recently announced its departure from the cryptocurrency market. As part of this decision, the bank will be closing its crypto mobile banking application, effective from January 31. This shift in focus marks a significant change in Vast Bank's operational strategy.
Back in 2021, Vast Bank introduced a mobile app, developed in collaboration with German software company SAP and crypto exchange Coinbase. The app allowed customers to manage their cryptocurrencies alongside their traditional checking accounts, making Vast Bank the first U.S. bank to integrate crypto transactions into a conventional banking framework.
OCC Consent Order and Regulatory Pressures
However, the closure of the crypto app is a response to a consent order issued by the Office of the Comptroller of the Currency (OCC) in October 2023. The OCC cited Vast Bank for engaging in "unsafe or unsound practices," which included concerns over capital ratios, strategic planning, project management deficiencies, liquidity issues, and interest rate risk management.
In order to address these issues, Vast Bank was required to submit a revised capital and strategic plan and establish a compliance committee. The decision to exit the cryptocurrency market is seen as a strategic move to separate the bank's core community banking services from its cryptocurrency initiatives, in response to regulatory pressures and to mitigate risks associated with digital asset custody and trading.
Closure Process and Customer Support
Customers who are affected by the app's shutdown have been informed that they are unable to transfer their cryptocurrencies to other wallets or platforms. Instead, they are required to liquidate their digital assets within the app and withdraw the funds in USD. For customers whose accounts have already been closed, Vast Bank has committed to issuing cashier's checks, which will be mailed to the addresses on file.
Vast Bank also assures ongoing support for obtaining account statements and other documents even after the closure of the accounts. This ensures that customers have access to the necessary information regarding their past transactions and financial history.
Implications for the Banking Industry
The decision by Vast Bank to exit the cryptocurrency market raises questions about the broader banking industry's stance on dealing with cryptocurrency and digital asset services. It remains to be seen whether other banks will follow suit or if they will continue to embrace the opportunities and challenges presented by the growing digital asset market.
What are your thoughts on Vast Bank's decision? Let us know in the comments section below.
Frequently Asked Questions
How much of your portfolio should you hold in precious metals
To answer this question we need to first define precious metals. Precious metals have elements with an extremely high worth relative to other commodity. This makes them extremely valuable for trading and investing. Gold is today the most popular precious metal.
There are however many other types, including silver, and platinum. While gold's price fluctuates during economic turmoil, it tends to remain relatively stable. It is also relatively unaffected both by inflation and deflation.
As a general rule, the prices for all precious metals tend to increase with the overall market. However, they may not always move in synchrony with each other. For instance, gold's price will rise when the economy is weak, while precious metals prices will fall. Investors are more likely to expect lower interest rates making bonds less attractive investments.
The opposite effect happens when the economy is strong. Investors favor safe assets like Treasury Bonds, and less precious metals. These precious metals are rare and become more costly.
You must therefore diversify your investments in precious metals to reap the maximum profits. You should also diversify because precious metal prices can fluctuate and it is better to invest in multiple types of precious metals than in one.
What are the pros & con's of a golden IRA?
An Individual Retirement Account is a more beneficial option than regular savings accounts. You don't pay taxes on any interest earned. An IRA is a great option for those who want to save money, but don't want tax on any interest earned. There are some disadvantages to this investment.
For example, if you withdraw too much from your IRA once, you could lose all your accumulated funds. You might also not be able to withdraw from your IRA until the IRS deems you to be 59 1/2. If you do decide to withdraw funds from your IRA, you'll likely need to pay a penalty fee.
Another problem is the cost of managing your IRA. Most banks charge 0.5% to 2.0% per annum. Other providers charge monthly management costs ranging from $10-50.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. Most insurers require you to own a minimum amount of gold before making a claim. Some insurers may require you to have insurance that covers losses up $500,000.
If you decide to open a gold IRA, it is important to know how much you can use. Some providers limit the amount of gold that you are allowed to own. Others allow you the freedom to choose your own weight.
It's also important to decide whether or not to buy gold futures contracts. Physical gold is more costly than gold futures. Futures contracts offer flexibility for buying gold. Futures contracts allow you to create a contract with a specified expiration date.
You'll also need to decide what kind of insurance coverage you want. The standard policy does not include theft protection or loss caused by fire, flood, earthquake. It does include coverage for damage due to natural disasters. If you live near a high-risk region, you might want to consider additional coverage.
Insurance is not enough. You also need to think about the cost of gold storage. Storage costs are not covered by insurance. Additionally, safekeeping is usually charged by banks at around $25-$40 per monthly.
You must first contact a qualified custodian before you open a gold IRA. A custodian helps you keep track of your investments, and ensures compliance with federal regulations. Custodians cannot sell your assets. Instead, they must maintain them for as long a time as you request.
After you've determined which type of IRA is best for you, fill out the paperwork indicating your goals. Your plan should include information about the investments you want to make, such as stocks, bonds, mutual funds, or real estate. Your monthly investment goal should be stated.
After completing the forms, send them along with a check or a small deposit to your chosen provider. The company will review your application and send you a confirmation letter.
When opening a gold IRA, you should consider using a financial planner. Financial planners are experts at investing and can help you determine which type of IRA is best for you. You can also reduce your insurance costs by working with them to find lower-cost alternatives.
What Is a Precious Metal IRA?
A precious metal IRA allows for you to diversify your retirement savings in gold, silver, palladium and iridium. These rare metals are often called “precious” as they are very difficult to find and highly valuable. These metals are great investments and can help protect your financial future from economic instability and inflation.
Bullion is often used to refer to precious metals. Bullion refers only to the actual metal.
You can buy bullion through various channels, including online retailers, large coin dealers, and some grocery stores.
A precious metal IRA allows you to invest directly in bullion, rather than buying stock shares. You'll get dividends each year.
Unlike regular IRAs, precious metal IRAs don't require paperwork or annual fees. Instead, you pay a small percentage tax on the gains. Additionally, you have access to your funds at no cost whenever you need them.
Can I keep physical gold in an IRA?
Gold is money and not just paper currency. It is an asset that people have used over thousands of years as money, and a way to protect wealth from inflation and economic uncertainties. Investors use gold today as part of their diversified portfolio, because it tends to perform better in times of financial turmoil.
Many Americans are now more inclined to invest in precious metals like gold and silver than stocks or bonds. It is possible to make money by investing in gold. However, it doesn't guarantee that you'll make a lot of money.
Gold has historically performed better during financial panics than other assets. Between August 2011 to early 2013, gold prices rose close to 100 percent while the S&P 500 fell 21 per cent. During these turbulent market times, gold was among few assets that outperformed the stocks.
Another advantage of investing in gold is that it's one of the few assets with virtually zero counterparty risk. Your stock portfolio can fall, but you will still own your shares. If you have gold, it will still be worth your shares even if the company in which you invested defaults on its debt.
Finally, the liquidity that gold provides is unmatched. This allows you to sell your gold whenever you want, unlike many other investments. Because gold is so liquid compared to other investments, buying it in small amounts makes sense. This allows one to take advantage short-term fluctuations within the gold price.
Statistics
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
bbb.org
forbes.com
- Gold IRA, Add Sparkle to Your Retirement Nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
investopedia.com
cftc.gov
How To
Three Ways to Invest In Gold For Retirement
It's important to understand how gold fits in with your retirement plan. There are several options to invest in precious metals if your employer has a 401k. You might also be interested to invest in gold outside the workplace. For example, if you own an IRA (Individual Retirement Account), you could open a custodial account at a brokerage firm such as Fidelity Investments. If precious metals aren't your thing, you may be interested in buying them from a dealer.
If you do invest in gold, follow these three simple rules:
- You can buy gold with your cash – No need to use credit cards or borrow money for investment financing. Instead, put cash into your accounts. This will protect you from inflation and help keep your purchasing power high.
- Physical Gold Coins – Physical gold coins are better than a paper certificate. The reason for this is that physical gold coins are much more easily sold than certificates. Physical gold coins are also free from storage fees.
- Diversify your Portfolio – Don't put all your eggs in one basket. By investing in multiple assets, you can spread your wealth. This reduces risk and allows you to be more flexible during market volatility.
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By: David Sencil
Title: Vast Bank Shuts Down Cryptocurrency App and Exits Digital Asset Market
Sourced From: news.bitcoin.com/vast-bank-withdraws-from-cryptocurrency-sector-shuts-down-mobile-app/
Published Date: Wed, 07 Feb 2024 06:30:44 +0000
