Banks Bow Down to Crypto

Banks Bow Down to Crypto

By xuanling11 | Crypto Learning | 27 Oct 2021


US regulators are exploring how to allow banks to hold Bitcoin. This big news may change how banks operate and how the Federal Reserve influences the banking system.

 

Banks want to become crypto custodians

Banks want to become your crypto custodians. They did a pretty bad job on your fiat currency custodians. Then they want to become your crypto custodians too. They may again play a charging game to punish you by putting money on them and stealing your funds regularly. 

 

Banks want crypto as collaterals

Banks can put crypto as their collateral but with less volatile price action. High volatile price action may cause banks to lose money simply because they function in a very slow mode and their bureaucracy makes their decision-making processes even slower than other private bankings.

 

The Crypto universe has no place for banks

When Bitcoin was introduced in 2009, it was invented as a peer-to-peer payment system without third parties involved. There is no banking needed to facilitate the financial transaction. Stablecoin was introduced to further replace the need for a central banking system and become a commercial money reserve system.

 

Banks are servers to the reserve system

Without cryptocurrencies, banks serve fiat currency and provide links to businesses and individuals. With cryptocurrencies, they want to become service providers to businesses and individuals by offering their crypto services.

 

Banks are becoming accessories

Cryptocurrencies make banks unnecessary and they need to find a better way to change to become a customer-oriented business model. Unfortunately, there are many other competitors who can provide better services such as payment systems like PayPal or crypto secured banking like Coinbase. Traditional banks need to change lots of their structure to catch up or they may be left behind.

 

In conclusion

Banks realized they need to catch up but the existing system is too big to fail. They need to find a better way to evolve or be left behind soon.


Photo by Markus Spiske on Unsplash

Note: the post was shared on multiple platforms.

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