It is actually bad for bitcoin as it takes away the decentralized part away from bitcoin. And it is hard to trust them as they might sell for fiat for their further investments.
i agreee with you 100%, you are in truth man, this is really bad for us i think, one of the most important thing of bitcoin is the desentralized part, with this we are going to the opposite way.
Dont forget that desentralized exchanges are comming, that exactly what we need and not those things trying to bring
BTC to the centralizated side...
I feel funny about the word decentralized these days, when the average user simply cannot mine the coins, but relies on buying them from farm owners. But ye, you can keep it in your decentralized wallet, like keeping a gold bar in your basement.
A trusted bank could boost bitcoin adoption for those users who cannot download a bitcoin client and use it. There are a lot of them. Of course, if you are registered here and reading this then you are most likely capable of dealing with bitcoins to a certain extent, but that cannot be told of the general public. Sometimes I don't see why the average user would use bitcoin if they can use (and are used to) banks/cash etc. For some it is just too complicated. An easy application like this may be the solution, maybe not.