Is cryptocurrency a threat to the traditional financial institutions? Big YES! Banks are afraid of cryptocurrency and with the grow rate of cryptocurrency now, the future of banks is really blurry.
Share
Sign Up to our social questions and Answers Engine to ask questions, answer people's questions, and connect with other people.
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
Is cryptocurrency a threat to the traditional financial institutions? Big YES! Banks are afraid of cryptocurrency and with the grow rate of cryptocurrency now, the future of banks is really blurry.
Cryptocurrencies, as it stands, lack many of the elements required for them to become fully fledged currencies because their lack of a proper system to control liquidity makes them too volatile to serve as a mainstream means of payment or saving. The second one is that banks are already aiming to adopt the underlying technology that all cryptocurrencies use, which is that of distributed ledgers, and use it to create their own forms of digital currencies with proper systems to control liquidity. Banks are more likely to adapt to the technological shift than to fall prey for it. However, what is surely going to happen is that banking services will become much more decentralized, as seen by the recent emergence of many new banking FinTechs.
No, cryptocurrency cannot replace banks. Crypocurrency has many potentials, yes, but replacing banks aren’t one of them. They may aid banks, or do other things that banks cannot, but replacing banks is not on their short-term agenda. In the long-term, yes, but nobody’s even close to preparing for that yet. There are too many powerful people involved for that. Banks don’t just perform electronic transactions and charge fees. They also lend money. This helps to fuel a lot of activity, from consumer debt to financing the purchasing of homes and assets for businesses. Even if we went entirely from fiat to cryptocurrency, banks still would find a way to stay useful and fuel debt.