It is a good development, but I won't welcome it to use for single users. This is a medium for everyone to bring their holdings into the custody of the government, whereby, taking it back becomes a challenge. Just as native banks operates, depositing large sum of your money into your account is not a problem, but taking it out is where the long term process will commence.
When it comes to loan, and you want to use Bitcoin as a collateral, I think the best action is to sell your Bitcoins, fix your problem and restock your holdings, this keeps you safer and keeps you in control, not bringing in a third party, not to say the government.
I'm having this curiosity over the interest on this Bitcoin as collateral. Anyone that must have taken study how defi lending work or that have borrowed money knows what is at stake if you use Bitcoin as collateral. You are just going to walk inside the bank and give them Bitcoin as collateral. What about the price? Bitcoin is volatile, if anything goes wrong with the price, I don't think the bank are going to sit around and watch the price go beyond what was lend to you.
When I see this kind of headlines, I knew we are in bull run, not only banks want this kind of things, other institutions does it but seeing that Bitcoin has not coross another all time high, this bank might really mean a business, that is if they have the intention to do it on the long run. You may wake up tomorrow and hear that they are no longer interested in this offer anymore.
