Also if accounts are holding our balances then they will naturally end up leveraged, i.e. fractional reserves.
This in my opinion is one of the most important points that the community misses.
if people start accepting bitpay (or any other service) balances as bitcoin, then effectively we are now using BitPayCoin because nothing stops them from changing the amount of coins people have in their database.
this will effectively break bitcoin's 21 million coin limitation and enable the same inflation we have today with fiat.
if we are to win the war for sound money the only bitcoin that must be accepted by people are bitcoins that reside on the blockchain, where the bitcoin protocol rules are actually enforced.
otherwise we have gained nothing and simply created new bitcoin banks.