Bitcoin Forum

It is true that the crypto-currencies will become a challenge for the existing fiat currencies due to many reasons. But my view is banks must not consider it as a threat and they should transform their business model to adopt crypro-currency as a part of their business. What is your opinion in this reagrd?

Yes I am supporting it. We are living in the digital era and it is not impossible for us to do everything in this age. Crypt-currency is the medium of digital transactions. That is why the banks are inclined to deal with digital transactions, and crypt-currency is a good way to deal with them and not think they are competing together. The bank should have a conscience to do this.

Banks as in "put your money in a bank to be safe" must go!. There is no point in putting bitcoins in a bank, unless you really want to lose them. Same for transfers between people, there is no longer the need for a bank.

As for the other things that banks are involved in, like lending and investment funds they can go with Bitcoin.
But taking a mortgage in BTC ....not a bright idea right now and for a few years.

Unfortunately, people storing coins in exchanges and online wallets show us a different trend.


conscience????

But the thing is Crypto is a threat to them, Cryptos have the opportunity to wipe banks off the earth if they were to go mainstream. It would make using banks worthless if there were massive cryptocurrencies that were facilitating world affairs and everyday transcations, this is something that the banks (HUGE BANKS) know and they're going to be making sure that they don't allow to go mainstream.


This right here, banks know that there will be a NET LOSS from crypto and why would they allow them to prosper?

It is literally a no-brainer, a 110% thing to do, and if banks don't do it they are stupid. We are witnessing a time akin to how the internet disrupted several industries and the ones who accepted it and adopted early on survived because they accepted their fate. The stubborn ones well they will last a little bit longer but once they begin to lose they lose so hard that they can't stay in business anymore. The key is to adopt and accept your fate which is what I think all banks should do right now. Look at ways of implementing blockchain but some will remain ignorant and think blockchain is a niche and will go away soon. I can't wait to see their faces in 5 years :).

I think you right. Some of the Banks in different countries are losing what they can, because they do not regulate Bitcoin. And it goes to their minds that it's going to be a threat to their fiat currencies that we know it's unlikely that digital currencies would not replace the fiat currencies that existed until now and even in the future.

Seems like they realized that we don't need them anymore that's why they consider bitcoin or cryptocurrency as a threat to their business.
Even though they transform their business and provide a better service but the question is, will crypto user put their coins and trust them? I don't think so, unless they're offering something beneficial for the user. Btw It's clearly against the concept of decentralized moreover we already have our own bank.

Banks create future bitcoin contracts to better control it

In Nigeria, we have seen the CBN Governor talk shit about Bitcoin and let me tell you the reason to that!
1. There will be election next year 2019: Many politicians go to the bank for loan during election period, to this effect, banks do not have enough deposit from the people because we have most Nigerians put their money in crypto than they have in naira
2. Politicians are scared that with the Nigerians are beginning to troop into bitcoin investment and trading right now, they might not have anything left for the bank
3. Politician invested their money in BTC when it was in its All Time High but they failed to get right mentoring forgetting about the bitcoin correction... Now they all think BTC is scam.

If we are going to give the banks the opportunity to lead the cryptocurrencies such as bitcoin, then maybe there will be limitation for transactions since it is not from the blockchain anymore. Another thing is that transactions will be longer than what it is today. Banks will be overload by works by the real currency added by all the cryptocurrencies in the world. There will be misconceptions, errors might happen, bugs such as not claiming the right amount and others. The people choose to be here in cryptocurrencies since it does not have any middleman and putting it in the bank will lose the consumer.

The system of cryptocurrencies is not yet "mature" enough for the central bank to regulate its operations. Perhaps banks can reconsider the decentralization of virtual currencies.

But I'm sorry, most banks think Bitcoin will threaten their position, not as a chance, of course, they do not know bitcoin technology, but they do not want to recognize bitcoin, they may use the block Chain technology, but still against bitcoin, after all, the government also likes to do such a thing, is not it?

the blockchain is purely the bank of future instead banks concentrate banning bitcoin holders bank account they should develop  blockchain for their future development

I think banks consider crypto-currency more of a threat than opportunity. They know that it provides a safer, faster and cheaper way to transact.  It’s also because the growth of cryptos will stimulate massive institutional interest and offerings. It’s unavoidable because it is anonymous and secretive.

Financial Institutions will never see Bitcoin, at least in it's current state, as anything but a threat. Bitcoin's fully transparent blockchain concept goes against the way a bank makes money.

They make money. Out of thin air.

While countries differ on their approach; in the USA and Canada; the system is based on Fractional Reserve Banking. The US requires that banks must maintain 20% of the money they lend out.

Again; banks need only have in their vaults and computer accounts 20% of the actual money they lend to customers through credit cards, home loans, car loans, equity loans, and so forth.

When a person goes to the bank and deposits their paycheck for $1000; this legally allows the bank to turn around and write a check to another customer (a person buying a used car); a $5000 cashiers check.  The $1000 deposit satisfies the $5000 check/loan it is giving out.

Thus, banks make money literally out of thin air. It does not exist. Globally, only 8% of the money in economy (most of which is transferred electronically) exists.

If every customer of Bank of America went in and asked to withdraw their money, it would be impossible for Bank of America to do so. They don't have it. It's been lent out. On a 5:1 ratio. The bank itself is debt.

This why they call it a "Run on the Bank", which caused the 20s Stock Crash and start of the Great Depression.

Bitcoin cannot be created out of thin air. There is no leverage or margin, unless someone is physically backing it with another funding source.

The transaction fees are built into the blockchain automatically; which are paid to the miners.

The miners control which transactions to accept based on the amounts people post as fees and the amount of available space left in the block being transmitted.

I don't see a way for banks to really capitalize on this concept. There's no need for a man in the middle or trusted third party. If you read the Bitcoin Whitepaper; the very reason for Bitcoin to exist is to be able to send money without the use of a bank in between the buyer and seller. It's designed to be used as a bankless currency.

Strato
 

What if banks will start to deal with bitcoin, but like an escrow, or like someone who saves the coins for you? I mean, they will offer their customers that they will keep and take a good care the bitcoin people are sending to the bank and people will be happy that the bitcoins are safe at the bank.
The reason I'm saying this is that there are a lot of people who have no clue about bitcoin and also a lot of people who have already read about bitcoin but they are not comfortable with it, they are scared by the new technology, etc...
People are not yet fully ready for the P2P payment transactions, because they haven't experienced it yet, unfortunately. (The saddest thing is, that I'm sure if Facebook implements a P2P payment system in the future, people will use it in two weeks time like they were doing that since they were born...)
Crypto people use the exchanges (otherwise exchanges would close down, if nobody was brave enough to store their coins on the exchange), they store their coins at the exchange, so why the average people would not trust the banks to store their coins...

I read an article today that said that Ethereum was more of a threat to the banks than bitcoin.

Ethereum attacks the banks most profitable business  - fundraising for new businesses via ICOs. Whereas bitcoin is just another payment processor.

I don't agree. Blockchain technology is quite the opposite of what banks want. They want to control transactions and blockchain don't allow them.

Note that, if they create their own cryptocurrency nad control the transactions, that is not cryptocurrency.

It is very true what you say because banks can add cryptoccurencies to their currencies so that people can buy or sell bitcoin with dollars or any other kind of money. This way it will be easier and probably safer for people to buy or sell their bitcoins because they do this through a secured company. Banks can add taxes for doing this and everyone would be in advantage because people could buy bitcoins and banks can make profit from taxes.

They fear crypto because if cryptocurrencies replace fiat then there will be no use for banks. If i am a crypto holder why should i give the bank a share in my cryptos by keeping it when i myself can keep it safe in crypto wallets? Of course they fear this threat and i am sure even  right now it already affecting them.

But banks cant control it, I mean the bitcoin and  altcoins. They cant charge for profit in the transaction fees. Your cypto wallet is almost the same as bank where you have the control of your crypto assets. This way bank is threatened and if more people are into crypto, more banks will be closed. They should start to innovate and offer more services that caters or use and incorporate blockchain technology.

You completely discard the fact that the bank can control your funds, and that it can force you to pay whatever fees if they think it's needed. If we look at how the far majority of the people use and store Bitcoin, then it's safe to say that they prefer to make use of centralized services such as Coinbase. Nothing in the world prevents traditional banks to offer exactly that what Coinbase offers to people, where if you think a bit further, they have more capabilities and liquid resources to push their operations to a far higher level. In easy terms, just like how people's wealth is stuck in the traditional financial system, a lot of people's crypto holdings is stuck in centralized services such as Coinbase.