I'm not trying to take a side here, we are all here to lecture ourselves about Bitcoin and crypto, and since few discussions about Bitcoin and Banks have been coming on recently due to the fact that banks will start giving loan services to Bitcoin holders ...

This have raised some concerns inside of me, and I need to let it all out ...
I read through one of this discussion and people are liking the idea so far...I don't completely hate it but...

I'm thinking 🤔, if banks can confuse people to take loan from them using their Bitcoin isn't this breaching decentralisation?
I am not perfect and I am not trying to be, all I care about is knowledge acquirement.

Bitcoin, without it's people is nothing, if everyone decides to give up on Bitcoin in a go it will affects Bitcoin, on the other hand, if the banks can control the people, what's left for Bitcoin ?

Centralisation has it's way of controlling and forcing people, if they can get their hands on people then they can control Bitcoin, the real strength of Bitcoin is it's people.

I read through one of this discussion and people are liking the idea so far...

I'm thinking 🤔, if banks can confuse people to take loan from them using their Bitcoin isn't this breaching decentralisation?

Bitcoin, without it's people is nothing, if everyone decides to give up on Bitcoin in a go it will affects Bitcoin

Centralisation has it's way of controlling and forcing people, if they can get their hands on people then they can control Bitcoin, the real strength of Bitcoin is it's people.

Bitcoin, without it's people is nothing, if everyone decides to give up on Bitcoin in a go it will affects Bitcoin, on the other hand, if the banks can control the people, what's left for Bitcoin ?

Not necessarily breaching, because the Bank only have control over their own acquired Bitcoin not the whole Bitcoin entirely, and whoever decides to use his Bitcoin for bank loan is the person's choice because the Bank can not force a person to use his Bitcoin because they do not even know if a person has some Bitcoin in possession, but it not possible to use an asset as collateral because Bitcoin is an asset and the person is also taking loan (money) which is also an asset, it is like an exchange of money for money, I have not experienced such exchange before unless the loan the person is getting with his Bitcoin is in form of something else.

Banks cannot control the people's decisions because that is certainly against the law, though they can strongly influence the people through easy credit access and financial services. But forcing the people to make use of their bitcoin as their loan collateral, that's already another story to tell. No banks as far as I know can do that, the final decision still relies on the customer itself.

However, we can't control if some bitcoin holders will use their bitcoin and take a loan. That's also their right because its their own rules with their own bitcoin.

Of course, the BTC will be stored by a special custodian institution, not held directly by the bank or kept off the bank's balance sheet. But in the end, I thought, they would not pledge Bitcoin to the bank to get fiat.

I'm thinking 🤔, if banks can confuse people to take loan from them using their Bitcoin isn't this breaching decentralisation?

You are right, banks will not be able to regulate or use Bitcoin as collateral. Besides, if you really need money, I think there is the option to sell Bitcoin rather than go into debt. Even if you want to take a loan, I think there are other asset options that can be used as collateral. Not all banks agree to accept Bitcoin as collateral. But whether this policy can help people or not is uncertain.