One of the things that confuse a lot of people is the relationship between bank accounts and Bitcoin services linked to this particular financial medium. If a Bitcoin company goes bust, the bank account in question will not be affected. But if a bank goes bust, how will it impact the Bitcoin service? Things are far simpler than most people would assume as there is no reason funds would be gone.
Bitcoin Services Are Not Limited To One Bank
Bitcoin exchanges will let customers add several bank accounts if they prefer to do so. In return, this gives consumers plenty of ways to cash out their Bitcoin balance, should something ever happen to one of their banks. With the financial crisis looming overhead, it is not unthinkable some banks might go out of business in the years to come.
Let’s assume somebody is using the Kraken Bitcoin exchange, and they have a particular bank account associated with that platform. This account has been used to both fund and withdraw the Kraken balance, and nothing has gone wrong with these transactions. Granted, not all banks are lenient when it comes to buying and selling Bitcoin, but let’s assume his particular bank is.
The financial crisis claims its next victims, and the user’s bank goes out of business. As a result, the bank account in question will be emptied and closed, making it unusable for future transactions originating from Kraken, or other Bitcoin services. Some people might think they would need to register a new account on Kraken to get the ball rolling again.
If this were to be the case, all of the funds associated with the previous account would be lost. However, Bitcoin exchanges are bank-agnostic, as they allow consumers to use multiple bank accounts when needed. Doing so eliminates any worries novice users might have regarding issues with their bank, for whatever reason.
While it is not a good idea to store bitcoins in an exchange wallet for extended periods, converting the digital currency to fiat can be done through other means as well. Most Bitcoin services allow a variety of withdrawal methods, including conversion to altcoins, or withdrawing funds to a wallet the user controls. This portfolio can then be used for different services, or even to sell bitcoins to an ATM and receive fiat currency in exchange.
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