Michael Saylor Faces Intense Backlash for Advocating Large Banks Over Self-Custody in Bitcoin Storage Debate

Many crypto leaders criticised the former CEO of Bitcoin bull firm MicroStrategy for suggesting that Bitcoin custody should be entrusted to banks.

Michael Saylor is the former CEO and current executive chairman of the Nasdaq-listed business intelligence firm MicroStrategy. Under Saylor’s leadership, the firm has been continuously purchasing Bitcoin since 2020. Saylor has always actively praised Bitcoin and raised awareness about its benefits.

On 21 Oct 2024, Michael Saylor shared his thoughts on Bitcoin custody. His statement was a stark contrast to his previous endorsement of self-custody. He now believes that “too big to fail” banks should be relied upon for Bitcoin storage.

In response to this personal opinion, many crypto advocates strongly opposed Saylor’s view, criticising the idea of Bitcoin custody being placed in the hands of banks.

CasaHODL co-founder said that placing Bitcoin custody with banks poses many risks, including centralization of Bitcoin, disenfranchising Bitcoiners from participating in governance activities like running nodes or trading forks, and hindering the advancement of cryptographic features, as institutions typically don’t care about technological innovation in crypto. Additionally, permissionless scaling could be deprioritized, as third-party IOUs would handle scaling instead.

Ethereum co-founder Vitalik Buterin also criticised Saylor, calling his comment “batshit insane.” Buterin pointed out that Saylor is promoting a strategy where large, regulated financial institutions like Blackrock and Fidelity would hold Bitcoin, ensuring alignment with lawmakers and law enforcement. However, Buterin argued that this approach has failed in the past and does not align with cryptocurrency’s core values of decentralisation and self-custody.

Read also: UniSwap ($UNI) token bull sentiments surge, following Layer-2 blockchain announcement