In a 2010 Bitcointalk discussion board put up, Hal Finney, a cypherpunk concerned in Bitcoin from day one, described the best way he sees the emergence of Bitcoin banks sooner or later. He believed that peer-to-peer Bitcoin transactions could be uncommon. As a substitute, folks will use better-scaled digital money issued by Bitcoin-backed banks.
How was Hal Finney, and what did he write about Bitcoin banks?
Finney was a cypherpunk neighborhood veteran, engaged on numerous options that might assist preserve on-line privateness. For years, Finney labored at PGP Company. He’s the creator of the primary reusable proof-of-work system, and he was the primary particular person to obtain a BTC transaction from none aside from Satoshi Nakamoto. No surprise he was an influential determine within the Bitcoin neighborhood. He died in 2014 on the age of 58.
In December 2010, the Bitcointalk consumer with the wobber deal with initiated the dialogue about how Bitcoin banks might work. Whereas some folks prompt that such banks might safely retailer purchasers’ bitcoins, charging them some charges or giving loans towards Bitcoin, others have been skeptical, viewing the concept as nugatory. One of many customers even talked about Ripple as an already current instance.
Hal Finney joined the dialogue. He wrote that Bitcoin-backed banks have a great purpose to exist. He noticed Bitcoin banks as organizations issuing Bitcoin-redeemable digital money for settling transactions. Finney famous that Bitcoin isn’t an environment friendly technique of alternate, so the secondary layer fee system will clear up this downside.
In one other put up, he defined that enormous purchases in Bitcoin want extra time in order that the events concerned will see a number of confirmations. Finney noticed Bitcoin-backed digital currencies issued by banks as the best way to keep away from this inconvenience.
In line with Finney, Bitcoin will probably be utilized by banks to settle web transfers between one another, whereas people will use different digital cash for normal transactions. Finney mentioned that banks can have totally different insurance policies, currencies, rates of interest, and so forth. He talked about George Selgin’s findings on free banking because the reference for Bitcoin banks and said that these banks might be self-regulating, steady, and inflation-resistant.
Was he speaking about Bitcoin treasuries?
On June 22, 2025, a Bitcoin Technique CEO at Semler, Joe Burnett, printed a screenshot of Finney’s put up, stating, “Hal Finney foresaw the rise of bitcoin treasury companies.”
George Selgin, whose work was talked about in Finney’s put up about Bitcoin banks, famous that Burnett is flawed that Finney was speaking about one thing just like Bitcoin treasuries. He wrote:
“Mr. Burnett doesn’t seem to know the difference between a bank and a treasury company, two entirely different things. What Finney envisioned was a competitive system of Bitcoin-based banks, the IOUs of which would serve as second-layer payments media.”
It’s truthful to say that Finney’s imaginative and prescient is approach totally different from Bitcoin treasury corporations, as they don’t subject Bitcoin-backed digital money that might have alternate properties. Treasuries subject shares which can be influenced by Bitcoin however not backed by it. Greater than that, these shares usually are not used to purchase something. Treasuries (e.g., Technique) usually subject debt to buy extra bitcoins, hoping that Bitcoin’s long-term worth appreciation will repay the debt or at the very least propel inventory costs increased.
Free banking, talked about by Finney, supposes the existence of personal currencies issued by banks. Such banks existed within the nineteenth century in a number of international locations; nevertheless, by the Fifties, they have been gone.
Do Bitcoin banks exist at present?
The banks described by Hal Finney don’t exist at present. Nonetheless, he wasn’t fully flawed about Bitcoin-backed banks. Some banks have parts of Bitcoin banks, whereas the crypto neighborhood embraced stablecoins, which function a handy technique of fee and financial savings.
As an illustration, some banks create treasuries to build up Bitcoin. They do it to hedge towards fiat cash debasement and consider Bitcoin reserves can increase their holdings. One of many banks that just lately began to build up Bitcoin is Photo voltaic Financial institution.
The concept of a second-layer digital fee system and a number of digital currencies is totally realized within the type of the altcoin market. Many cryptocurrencies are low-cost and fast to transact, so on this regard, Finney was near what we all know at present. Nonetheless, only some of them are issued by the banks; largely, it’s stablecoins. Central banks of a number of international locations are engaged on CBDCs, which aren’t Bitcoin-backed.
The DeFi platforms might present a few of the banking providers in a decentralized method; for example, it’s possible you’ll lend or borrow crypto there or hold it in alternate for yield. Nonetheless, one can not redeem these cryptocurrencies for a hard and fast Bitcoin worth. Such a phenomenon as neobanks is a kind of platforms that present bank-like providers and permit operations with crypto.
Selgin claimed that he doesn’t suppose Bitcoin banks will emerge quickly, as there won’t be revenue “in supplying substitutes for a relatively unpopular means of exchange.” Nonetheless, Selgin isn’t dismissing the potential emergence of Bitcoin banks sooner or later.