Bitcoin Forum

Just started to learn about DeFi, and a question arose.

Fiats have a loan mechanism. Manufacturers use it to improve their production.

Is there something similar in crypto? How does it work then? And are such services in demand? Do manufacturers take loans in crypto?

Isn't that killing DeFi idea? Is there a future for loan mechanism in crypto?

Thanks everyone in advance for the answers.

Here in crypto ... you simply emit new token, create its value using profits from "improved production" and collect millions from investors which act like decentralized lender here. But if you want a real loan there are already bunch of projects that solve this. The only problem is collateral. So far there is no problem to borrow crypto using other crypto as collateral but sooner or later we will see companies that will offer lending using "real word" collateral, but there is no privacy anymore and most likely no decentralization.

I think such systems have not survived far enough really. There are some projects that tried lending in the past but I don't know how far they went or they defrauded and took people's money. Collateral has been a big challenge for this. This is why here on the forum, such program do exist P2P but with third party escrow which could also be as a result of the campaign a collector member is promoting.

Yeah ... So the main problem is tying loan to the "real world". I heard that someone is making stablecoins tied to fiat. Is this a half measure and not a solution of the problem? Couldn't this attract manufacturers who are interested in crypto but are afraid to mess with it? Pegging stablecoin to USD as example could push them to work with crypto, I think.

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Can you tell me more about this P2P program? Or can you give me some links where I can learn more about it?

[moderator's note: consecutive posts merged]

The first thing you should pay attention to is the level of crypto price volatility. Not that stablecoins can be used to provide real-world loans, but whether a country can provide space to include crypto which until now is still in category 2, namely the investment group.
If we refer to the future, maybe it's not the time for us to say precisely. it is possible when the two institutions of decentralization and centralization can be combined in one financial system. Is that possible?

maybe it goes back to fundamentals and market capitalization and volatility in crypto.
when talking about this, it will automatically give us the answer to something definite, namely the centralized system used by banks to date and the decentralized system which is still the distinguishing feature of crypto.
logically they will not be able to be united at least for now because of the view of the two systems.

You're right about that crypto price is very different in real money and its bot easy to loan in crypto of the volatility than real world loans. About the investment group in crypto , there are some gives you a good idea some are down you instead of gives you an good advice.

I think they need more research if this two are ready too combine but i think in the future this two are possibly combining because this are important with differences for us. We just wait until they come.

I don't know about anyone else, but the above post makes very little sense (especially the bolded part).

OP, you should do a lot more research, not only into DeFi but into cryptocurrencies in general, as it seems you're very new to the space--and if that's true, then welcome!  Crypto is fascinating and very profitable if you know what you're doing.  As far as loans and banks, I don't think banks want anything to do with crypto or the loaning of it.  Why would someone want to take out a bitcoin loan, for instance?  Probably to gamble or to speculate in risky investments, and banks aren't in the business of making those kinds of loans.

In addition, there's the issue of collateral.  On this forum there's a lending section, and the last time I checked there were members constantly looking for no-collateral loans and very few members taking out loans with real collateral (altcoins are basically the only good form of collateral for crypto loans).  I don't know much about DeFi myself, but I have a feeling it's not going to be a threat to the banking system like some people say it is.  Time will tell.

Please allow me to clarify the sentence that you have bolded. Thank you in advance for asking this question.

I mean, referring to the context of the OP statement regarding the future crypto lending mechanism.

However, looking at the situation and condition of government policies and institutions, Banks have not yet given a signal of support for crypto. In fact, we all know that whenever crypto exhibits freedom of transactions as well as individual financial freedom, the Bank considers what we have as a form of money laundering.

This so far, of course, is an illustration based on my personal point of view that it is still not right to say that there is a license for crypto lending that is legitimized by the Bank.

(I hope you correct if there is a misunderstanding of what I said above).

I don't think so, there are payment apps that accepts crypto and converts it into fiat so I don't think that we're going to need bank in our crypto, not to mention that their obsolete, we don't need a middle man in crypto so no worthy reason why we need them in the cryptospace.

Yes, the banking system is different from the cryptosystem so no need for banking involvement. Lots of people think that this is system operate by own block chin based so no need other anything.

Not only do cryptocurrencies reduce the need for banks, but so do CBDCs. However, a while ago I heard Christine Lagarde talking about involving banks in the digital Euro issue, meaning that they are going to try to keep the banking industry afloat no matter what, which is nonsense. It's like trying to keep video stores afloat with the advent of the Internet.

Banks usually make a profit through customer transactions and other services but this applies to fiat currency banks will not be needed once cryptocurrency is introduced but then the economic institution called bank may be completely wiped out. The central bank has an eye on any transaction there is no interference from anyone for crypto for these reasons central banks have banned cryptocurrencies the crypto market is more profitable for crypto than banks.

There are already existing loan mechanisms in crypto. It has been around for quite some time. I remember during the height of ICO, I encountered projects which are offering crypto lending services. I haven't heard of them since, though. But there are several DeFi platforms which offer lending services right now. And I guess the demand is quite high. As a matter of fact, Binance has also been offering lending services for quite a while already.

Loan has been a basic financial service, so I think it won't simply go away even if crypto replaces fiat.

Loaning was never something that was solely limited to banks though. Crypto was just being your own bank, it never said anything about removing the concept of what banks are, you just become one yourself imo. Plus, there's a lot of centralized exchanges out there that have the lending system, just that you need collateral to go with it. I dunno if it's actually in demand, but I don't think it would actually disappear, it's always been a part of the financial system after all, as long as transactions exists, loaning would definitely be there imo.

P2P means you make a deal with someone, whether it is a transaction, sharing data, or else. In crypto, there is P2P trading which means, you and another person buy and sell crypto. You can find it on Binance as the famous P2P exchange and you can meet your local or non-local seller who buys and sell crypto.

The banks can be a bridge between crypto and fiat and they can use that for their benefit. For example, they can use a rate price for sending and receiving the money.

I know the loan is available on exchanges, but you can take a loan from someone here, but you need to have collateral before you get the money. You need to pay the money plus the interest.

Banks aren't required for anything is a fair argument, do they assist at times is probably a better line.   No bank setup or even helped with BTC in its originating years that I ever heard of.   It was people and this is a good rule for the entire economy, people are strength and wealth in any nation far more then the largest apparent entities like banks or governments.   Actual assets, products, innovation and the greatest growth comes from the smallest entities in an economy which is plain people, sole traders and very small companies of people.  How can that be is also simple because there are millions of the very smallest traders, producers, users of BTC are ultimately what is going to decide if BTC grows.   Banks are just a sideshow, they appear because its already an established trade and they want a cut of that revenue.

Peer-to-peer lending is a thing in the crypto industry.Some p2p lending platforms disappeared,like BTCJam.
You just send 120% worth of altcoins,that have a relatively stable price as a collateral and you get 100% worth of BTC as a loan.There's a lending category on this forum.
Big crypto companies like Nexo are offering such services and promising a pretty good 12% interest rate,AFAIK.I have never used their services and I don't recommend anyone to borrow a crypto loan,unless he knows what he's doing.
Crypto lending seems pointless to me,because of the volatile prices of almost all cryptocurrencies.

This is the real world. Get a grip on buddy. ;D
The moment you stop differentiating real world vs crypto world, things will get better for you to understand. Loans are still going to happen in fiat. This is an early stage to comment conclusively though. DeFi does not solve every problem, just like bitcoin is not the answer to every problem.

There are stablecoins pegged to USD. But I dont think this idea is what crypto users like in the majority. They are useful as intermediary for dollar cost averaging while trading but beyond that I find no extra use.

Moreover, if there would start lending in terms of crypto, the already existing P2P systems are going to work fine. But here you need to pledge another form of asset as collateral to get the loan. In fiat economy you also need some sort of security for the bank to protect against a default too.

If in future, banks start allowing cryptocurrency lending, this can be a big opportunity for them and a big competition for the existing p2p lenders, because after all, nobody trusts loan sharks and their interest rates.

I opened a thread to discuss the problem not that long ago. What I got from it is that you would likely need some short of intermediary to make it work, call it a bank or a rating agency and certainly a legal system that can enforce contracts outside the blockchain. Crypto in that sense is not that powerful, but the good nes is that you can build a system on top that works as good or perhaps better than current banking systems.

https://bitcointalk.org/index.php?topic=5357200.msg57814452#msg57814452 (https://bitcointalk.org/index.php?topic=5357200.msg57814452#msg57814452)

yes crypto has a simillarity on how things work with fiat because cryptos are also a currency .
 its indemand , there are lots of crypto loaning platforms and yes a manufacturer can take loan in crypto to make thier business grow more or if they having a problem in financial .

you mean banks ? because banks are the one that issued the loans but not all loan money for that same purpose  .

The Fiat system is built on "loans" and "Bonds" that are offered by the Banking system to exploit people and to keep them in debt for most of their lives. Crypto currencies on it's own (the technology) does not make provision for these services, because it is not centralized and it is also more geared towards being a currency.  ;)

Some people have created "loan" services on forums like this, where they use reputable escrow services... but it is not very popular, because most people succeed to exploit it.

Bitcoin does not replace "loan" mechanisms like Banks and Shark loans, because it was meant to be an alternative currency.  ;)

In my opinion, I could say that we don’t need banks if a lot of vendor or merchants are accepting cryptocurrencies as the main medium of exchange than fiat. Imagine if a country implementing USDT as their main currency than the traditional fiat for buying goods and services, paying bills, education, transportation, etc., banks would potentially cease to exist. Again this is just my own opinion regarding the scenario.

I think banks don't need cryptocurrencies but need blockchain technology to see every transaction in banks, currently there are too many problems in banks, especially transparency from banks so transactions from state officials are never known, so banks are more anonymous than cryptocurrencies.

The mainstream economy is based on debt. The crypto economy is based on people's network without any third party controlling it. So ideally we don't need banks for a crypto ecosystem. But since crypto is not a mainstream economy, we need an integration layer so that crypto can function with the mainstream economy. That's where we need banks and exchange services.

Defi is a very new type of concept and it doesn't function like banks. In bank, you can get a loan without collateral but that's not possible in defi. I don't see Defi taking over as a mainstream loan mechanism.

Yes, but I mean this particular banking option as a way to improve production without considering everything else.

Banks are essential part of a the cryptocurrency network. In one way or the other cryptocurrencies have connection with the fiat. We can go into complete decentralisation or into some form of anonymity. The cryptocurrency network is at its very beginning time period of market widening. So, we can see more new ways and innovative platforms to reach the common people. This will happen to some extent, and beyond that only banks can provide the service to the common people.

this is what makes them incompatible with each other, and when bitcoin becomes legal and becomes one of the legal payments in one country, the bank automatically has a competitor who is arguably better than them.
and consciously or not with bitcoin which is one of the legal means of payment, people have many options, of course most of them will choose bitcoin with banks even though they cannot eliminate the existence of banks and fiat but indirectly and slowly they are eliminated by that matter

If you are pertaining about loans then there are services out there who do offer such thing but you know that volatility is something that cant really be stopped which means neither you do pay more or less
on the said interest for the loan that you had attained.

Although this isnt talking about institutions or something but rather people who do ran off their own personal money.Banks are irrelevant on this market and thats why crypto
did exist on the first place.

We dont need banks which are heavily centralized it does work for other purpose which we had been using through ages.

I disagree, that could be done inside blockchain as well and it could be done using third party apps instead of banks. You could do loans, stock markets and many other things in crypto, and you would only need a technological help and not a law related or bank related help. Think of paypal but for crypto, people could all put their money in an app, and they can move money around between accounts without paying transaction fee, that app would be just helping people move money around.

This is how you get rid of banks. However, Banks are so powerful that no matter how strong bitcoin gets or no matter how much it is adopted in our regular world, banks will always stay powerful, bitcoin can't take that power away from them. We are talking about trillions of dollars worth power just in USA and combined makes up for tens of trillions of dollars around the world, bitcoin itself is barely one trillion dollars on a good day.

We could have a mechanism that is more suitable for True Cryptos due to their decentralized nature, and we could have a Crypto-friendly ways that ensure that loans are use for good things that will be profitable/useful for society and people.
In my opinion, using loans for autonomous DeFi to fund companies that are dependent on the system may not be a good idea idea. That will be a serious mistake especially if the right things are not put in place first.
I think a True DeFi should be based on economy activities that are independent of the system and are according to Bitcoin/Blockchain ideals if it wants to remain truely decentralized and sustainable

It is time for banks to follow the current trend, the number of users and investors of cryptocurrencies continues to increase so that if they do not use crypto then banks will be left behind and go bankrupt, crypto is a technology that makes all parties benefit and banks must immediately adopt cryptocurrencies.

It's quite understandable that if their is no bank cryptocurrency will not have a nice bond, so bank play more role in cryptocurrency because of it Fiat, it's very obvious that without fiat cryptocurrency especially bitcoin will not have much firms, except it's a situation whereby fiat will be replaced in the name of bitcoin, fiat is an ancient currency which is older than any other currencies seconded by Gold currency, so without fiat collaboration with any other cryptocurrency like bitcoin it will be very difficult before bitcoin will be accepted as a legal tender in some countries, so fiat is another alternative thats excavating the influence of bitcoin currently, that's from my views.

Here's how things work over here, you have to have almost double the amount you intend loaning before you can take out a loan as collateral are needed to be able to apply for loan.

That means you basically don't have to need a loan before you'll be eligible for a loan which isn't any different from the real world. Why don't you just sell portion of your asset and clear that problem you need the loan for. The only difference here is that anyone with the money can get access to a loan unlike out there.

For your topic question, Banks are still needed for the moment because we still have to convert our coins to fiats before we can spend them easily but that'll change in the future as more marchant will be accepting cryptocurrency meaning you won't need the flats to be able to transact daily.

This is the only point that every crypto users are waiting for because finally digital assets like bitcoin and ethereum and all crypto tokens can be used to purchase goods and services without interacting with the banks. Today, banks are just needed for transaction of crypto to fiats because crypto is some or many countries today are not yet legally adopted and the only thing that a crypto user can use their crypto to purchase goods and services is to transfer or convert their crypto into fiat through bank process but if merchants would accept crypto then I think banks will soon not in need in crypto.

Banks and cryptocurrencies are 2 things that are difficult to put together, maybe like water and oil, the presence of cryptocurrencies is certainly a competitor because people don't need the services of banks to transact, people will find it easy to control finances and transact cheaper and faster than banks.

Like water and oil, they can still be mixed with the right implements and right ingredients. Maybe we just need to find that metaphorical implements and ingredients to have banks and crypto work together. Yes, we don't need banks but a coexistence could be a better way of handling things.

The loan mechanism is not mechanism for fiat, it is a mechanism for banks and people are ignoring that part a lot. You do not get loans and it is saved and secure and everyone either pays it back or get sued etc just because it is fiat, it is done because banks have that legal option.

So, let's assume that banks are allowed to give crypto loans, what will happen? They will ask you to come in, sign some papers, show some collateral and then they will give you the loan and you go on with your day, either you pay it back or if you do not then banks will sue you and courts will find you guilty and your stuff will be seized and so forth. Which is why I believe we should be a lot more calm about crypto loans since it can be done with a single law.

All banks have stocks and sponsors as well as partners behind them are large domestic enterprises, the biggest businesses in this country happen to have heads who have relationships with politicians, with terror like that, thinking the bank can fall behind and go bankrupt is very wrong, too many bankruptcies have happened before but now, only the strongest warriors survive. Being so politically friendly, the bank understands when they will need to set up with crypto, they have no idea more than simply the politicians behind have not given them the information, the tendency to be too young is very easy to die prematurely

It can be said that the concept of Defi is still very new and the government will definitely not let defi from their attention.  but defi will definitely shift the bank because the borrowing process is easy and simple, not like a bank that is very complicated.

If you could design and build the perfect bank limited only by your knowledge and the depths of your imagination. What would it look like? How would it compare to current era banking institutions? Do people need better banks or would society be better served by banks offering fewer tools and options to clients: forcing the public to rely on them less?

Banks definitely enjoy some advantages at the moment over crypto. Brand name recognition. Endorsement by public and private sectors. Trust from the public as a reliable institution.

Some of the advantages crypto has over banks are: flexibility, decentralization, trust less design paradigm, far lower barrier to market entry, et cetera.

Its common for people to approach the topic as if banks and crypto were two predatory animals that will be thrown into a UFC cage to do battle so a victor can emerge.

I think all people care about is having the best tool for the job. Whichever demographic, whether its banks or crypto, who offers the better product that gives people access to better opportunities and options is what they are likely to pursue. The free market determines the value, and worth of things.

I think we can only predict it, on the other hand the biggest power is in the hands of the government, while banks are under the control of the government, even though they have a better system, but I don't think it is easy to influence the government with all its advantages.

No way that crypto needs banks, I've been using crypto for a long time and I don't use banks just to convert or buy some crypto. Banks are a different kind of entity, it may coexist but merging isn't the best for both especially for cryptocurrencies.

I think crypto loans are here since many years and there seems no issues with anyone: the lender and the borrower. Even the bitcointalk forum has it's own section for the same. Though volatility is a great issue in the crypto world then also the interest rates are decided as per the deal which sought at first and peeps keep paying accordingly. There are also projects for this purpose where escrows are set and loans are given away. Not sure where does the OP is stuck in terms of loan situation.
Banks are not needed at all. All you need is good escrow who can handle the both parties which I see as close to as bank itself. In fact involvement of third part add up more security too if it's valid source.

I don't think it is yet a reality that you can live comfortably and without major disruption in your life if you only have access to cryptocurrency. Whether you want to grab some fast food or fill your car up with gas, most mainstream companies still only accept fiat currency. It will be that way for quite some time, although we are seeing a gradual shift with certain companies trying hard to accept crypto, it will be a major inconvenience for the average consumer. Loans only work when you have trust involved and one of the underlying principles of cryptocurrency is the anonymity it gives to you, so it feels like you have to either pick one (by providing your identity to loan companies) or provide enough collateral to make the loan risk-free which is self defeating in most circumstances.

I was discussing with a colleague in the forum some time ago. I discovered that, for the few users that takes loan, some form of collateral was given often. Most times, it almost equals what your requesting just that, it might be usdt against bitcoin and I kept wondering, to what point is it!
How can I have usdt of almost equal value and instead of exciting it for the coin of interest and be about my business, I proceed to getting a loan. It doesn't makeups sense. What's the idea behind this sort this sort of behaviour because, I just don't get it at all.

Why people do really think off about merging or replacing fiat in the first place? Banks would remain as long fiat would be still there and its true that banks are regulated which means they do really need to

follow up on what government rules is.Crypto doesn't really need any banks because you could be your own bank on yourself and that's the beauty of it but we cant really deny that

we do still make out some active conversions which would be ending up on having fiat in the end of the day.

We can't say "needed" but do you really want to turn down such a powerful ally? I mean the only reason why I am in crypto is banks, I hate banks, I literally hate them, there are no organizations or business in the world that I hate more than I hate banks, I am using the word hate here.

However the moment I realized that banks could bribe politicians into getting crypto accepted and supported and loved by a government is the moment I realized that there is nothing wrong with accepting banks as allies. We can still use crypto without a bank if we want to, there is nobody forcing you to put your crypto in a bank or something, but if they are in our side, then it would be a lot more profitable for us for sure.

I find it hard to imagine a world without banks, because the government needs banks as a third party to control the people's finances. So no matter
how good crypto is, it will not replace fiat and if there is fiat, the presence of a bank is definitely needed. I've always thought it would be better for
crypto and fiat to co-exist, so they could complement each other. Indeed, crypto transactions do not require a bank, we can convert one coin into
another without a bank. But the problem is that not many merchants accept crypto payments, in fact there are still many countries that prohibit
crypto as payments. In the end we need a bank to convert crypto into fiat, so we can use it to buy what we want.

There wouldn't be anything specifically changing, just a bit more decentralized and more like a wallet. So, right now banks work to make a profit, and the idea is not really that different from mine, the only thing different would be people would use it simply just for the storage part of it, I do not want to carry out too much cash? I will put it in the bank. It works perfectly for that purpose and that has been enough forever.

I do not believe that it should be anything more than that ever, loans and debts and everything else seems to be the main reason for this problem. Sure if you have a house and you want to get a loan then you can take it and your house will be sold if you ever fail to pay your loan back. However if you have nothing and you are still expected to pay back then it is not going to be fine at all, I prefer not to go with that route. So just.. a wallet service called banks, that's it.

Depending on how the situation works out with loan, if every investments from bank would technically going to be successful I guess that's not a serious problem at all. Worst thing is that, taking loan risked so many things like monthly bills that we needed to tackle with. You just can't ignore payments while your crypto asset goes down in value, that's why you tend to lose your capital in many cases. So I don't really recommend bank as source of your crypto investment.

DeFi offers services of lending, borrowing, staking, farming several ways to make your money produce. So far I have participated in staking and farming services. With these two reward incentives I have earned and I really like it. I had the opportunity to invest with a minimal investment and win.
Only you should investigate and join just hodl is not enough we have the freedom to learn to manage our money.

We don't need  banks for crypto. Adding banks would just make the whole system centralized which is what bitcoin and most of the crypto currencies are completely against. Borrowing money or taking loans in crypto in a decentralized way might be very complicated. I don't think there are currently any projects that offer anything like this. There used to be (not sure if they still exists) centralized platform where users could take loans in crypto. You had to give something else (more in value to protect lenders from volatility) as collateral. A centralized way with a third-party ensuring everything is fair.

Totally agree, I only use online payment apps that can be connected to Binance to get my fiat that came from my converted crypto profits. Definitely bad for crypto to merge with banks since the people at the top of the bank is definitely going to do something so they can fully control crypto when they merge.

What is a Bank in common man's view ?

A place where one can make use when there is financial need. The service is provided through collateral and several other means, though the banking network is taking control of people's money there is some form of connection and trust.

Now when we talk of what's the need of Bank for cryptocurrency. In my country everyone is made to create a bank account. There are exceptions without banking account. When we think of taking the cryptocurrency among the entire population, banks can be used as a channel and it gives people more trust than reaching people through other means.

Its the other way round this time. Banks need crypto and blockchain to become useful for the people who engage in the blockchain.

Today I read some news from the cointelegraph about a bank in El Salvador working with the Bitcoin Defi platform Sovryn which is popular in the forum. Developers I think are happy to work with banks as well to spread the adoption.

I don't mind banks existing in a crypto environment. They'd just be what the modern day exchanges are with no fiscal control over the global markets. My biggest problem with central banks (among other issues) is they don't even try to be fiscally responsible. They'll purposefully manipulate the currency in order to push spending by creating a built in inflation mechanism.

Imagine if within the Bitcoin protocol there was a mechanism involved that diminished your balance of BTC by 2 percent every year. That's modern day inflation for you, where central banks target inflation at some arbitrary rate year over year to discourage folks from hoarding currency.

Absolutely not.

DeFi and other instruments have only pushed us closer to this eventuality.

Banks are exactly what crypto promises to replace. Stablecoins which require banking institutions to be effective are not the way forward.

Before starting out, I will like to make my observation clear that your topic question is totally different from the content of your post. The mention of banks in the title that deviates from the context (not content here) doesn't distract the dual nature of your post anyway. Let me dwell on the title – "Are banks needed for crypto", however. To that I would say, yes the crypto industry needs banks to survive and make a headway. There's a reason Bitcoin started out with fiat pair. It amuses me when I hear people argue that banks should be jettisoned when it comes to cryptos. It will be an uphill task to achieve Bitcoin greatness without fiat and the banks, really.

You are right we don't need banks as these could be to make all this centralized, and we are doing things against this all. Crypto is just being your own bank, it never said anything about concept of what banks are, you just become one yourself. In crypto, there is P2P trading which means, you and another person buy and sell crypto.

These days crypto is in beginning time, so we can see more new ways and platforms those happen to bank can serve better services to common peoples. Even it's going to take very long time because right now too many regulations coming for controlling crypto.

To be able to survive in the future, of course, banks must immediately implement blockchain technology, this is the future of transaction systems and blockchain is the answer to all the shortcomings that exist in banks, besides implementing blockchain, banks must also have crypto so that customers can easily access their assets.

Now things are changing very quickly around the globe so if Banks to go with this all changes then surely they need to adopt this Blockchain technology and have some better policies for cryptocurrencies as well because now in future crypto technology is going to be bringing some good ways for common peoples and with these banks also need to have these changes.

Right now in many countries banks giving some good services which are need of time as they can't live without banks but after adopting this technology they will be able to serve in better way as this will bring some better speed and transparency in their service satisfaction for common peoples.

And also the tax would surely be implemented if crypto will be tied nor be adopted with banks so I prefer that there's no institution like that holds bitcoins since its really bad if they take certain parts of our earnings if they enter the scene then government will regulate it.

But maybe we can see this happen but as you said this is long to debate by certain officials if they really want to do it or not.

There are lots of platforms in the cryptocurrency world where you can take loans for whatever you want to do. But there is a way that this works in the cryptocurrency world, when you are about to borrow money from any platforms such as Nexo.io, you will be required to make use of Fiat as a collateral for the loan you are about to take.

Without your Fiat as a collateral, you won’t be able to borrow any loan from these platforms.Personally, I don’t think that we need any bank to make use of cryptocurrency. Bitcoin and other cryptocurrencies that are similar to it were created to be managed by us personally and not by the banks.

Be able to change, how people there way of living,it's big contribution to the people if cryptocurrency will be together and join to all banks,all process and methodes will lead to be faster distribution to people  ,service will be good and  also will increase  people to enter to negotiate some business.

I think that there will be no need for banks to use cryptocurrencies. Now, we need banks to convert our cryptocurrencies to a fiat currency because we mostly spend fiat currencies nearly everywhere now. And unless we are able to use cryptocurrencies almost everywhere, we will be needing banks in the future too. Besides, the digital currencies that are in development by governments can replace fiat forever and then, banks will also have to transform into a much different structure to be able to survive.

I think that these projects do not need lending, from their name you can know how they work "decentralized financing projects" that is, the financing is done by users in a decentralized way, meaning there is no one person, institution or one central company that does the financing, therefore I do not think that we need to Borrowing because these projects are decentralized self-financing by users who finance the project and then take profits as a return on the financing they have made.

The loan system adopted by the bank requires you to have collateral in the form of physical asset such as cars, vehicles, houses, land and so on. I think that is also embraced by projects that have loan program in this space. Unsecured loans are still currently on the loan board, but the number of loans you will get will be very limited and probably not all borrowers will be approved by lenders there. If you want to get a loan easily, then you must have collateral that you will bet here to get 50% -80% of the total value of your collateral.

OP, I think almost everyone has the same thought about your question or at least they have answered you correctly. Don't really know what caused the defi project to be affected by this situation.

Mate, in many countries we still need banks as these are very important and part of life for millions because they can't do many things without them. One thing is sure this is going to be big challenge for banks if they are not going to adopt new technology and better ways for peoples because now just because of this crypto we have revolution in many sectors which is changing life of peoples, so they also need to go with this all.

Now one question is many countries already done good for crypto so they already in good process for use of crypto, and they can handle this all without any bank help but in few countries where system is not updated even crypto is in between legal and illegal we still need them for converting crypto into fiat.

For most countries, banks are really needed, even holding the economy of a country, until finally many people also need banks, not just the state. even though crypto is decentralized, I think it will function the same as fiat, as a currency. and borrowing and borrowing will always be there because we are social creatures

I think that now everything changes to: Banks need cryptocurrencies ", currently the intervention of banks is not needed for cryptocurrencies, in fact there is a symbolic act that is taking place from Spain, (I name Spain for being a very radical country in terms of Regarding taxes and payments to the government (Treasury)) are studying the possibility of implementing crypto in the BBVA bank, which will allow all BBVA subsidiaries in the world to accept cryptocurrencies and use them.

This means that apart from JP Morgan having to lower his head to BTC, when his clients demanded that he accept BTC, now one of the greats worldwide such as BBVA is joining this party, in this way it is like the greats Corporations bow their heads to the representative of the economy and financial freedom.

The banks will decide whether they need crypto or will still use their way to control the finances. If they are aware of the development and have a vision for the future, they can learn about blockchain so the banks will get their position in cryptocurrency. The banks themselves will still be beside us and serves people who want to transact. As long as we can know how to treat the banks, we will not have a problem with our money. I think the banks will learn or research about blockchain and if they think that it is good to implement the blockchain in their system, they will use it.

One don't really need Bank before you can get lone because not only bank that give out loans. There are companies and private individual who currently give out loans currently in Bitcoin and other crypto currency both within here and outside of this forum.

Bank is not needed for cryptocurrency currently but I think as time goes on, there will be need for banks to come in and help evaluate and carry out there own obligation in making sure that scam activities are eventually reduced through the help of government.

But the problem with those private ones are higher interest thats why people are getting into the banks though there are a lot of requirements and a lot of papers need to fulfil they will do that so that they will get low interest. When you loan to individuals mostly you could get easily the money but the problem with this is really high interest and you should pay it monthly also if you fail to pay it there are more addition to the interest

That will only only happen government of countries around the world has accepted Bitcoin and other Altcoins as a medium of exchange for goods and services. Although, there company like Binance and other crypto currency exchange companies are offering loan services already so it might not be necessary Banks.

Bank payment is also an option in some exchanges and I guess, as long as fiat is existing, banks will still be needed in crypto especially if we're transacting a huge amount of fiat and local encashment is needed. However, I believe that crypto could work independently in the future. It only needs time and more adoption.

Banks will already be in the crypto world when they are working hard, at the end of the day we are in capitalist world and if there is a money to be made then they will make that money and they will not leave anything behind. Which is why I honestly believe the moment bitcoin becomes something that is proper and legal and accepted everywhere, we will see banks get into it as well.

Banks do not get in right away with their own money, there are hedge funds that they bankroll which would be the reason why they end up making a profit from those hedge funds actions. Look at USA, literally the exact same thing that I am talking about is happening there as of right now.

That means banks are already entering the crypto world but do not announce it to the public but still hide what they did in crypto. Maybe their government asks them to do that so they tend not to react much about bitcoin euphoria. But when their government says that they accept bitcoin, the banks are ready to implement blockchain inside their system. That is smart moves from the banks if they do that because people will not think about what has been prepared by the bank.

Yes we don't need anymore banks because crypto isn't made to be dependent on banks. More and more countries and legal tenders are now accepting transactions in the form of crypto and someday bitcoin and other leading cryptocurrencies will be legalized in the whole world and that's the specific goal of bitcoin.
In addition, banks nowadays aren't trustworthy anymore because anytime they can declare bankruptcy which we don't want to happen.

You Subject is entirely different from your write-up. But I will say you don't need a bank for crypto

Absolutely not. Banks are middlemen that DeFi is trying to replace.

Sure, it may seem impossible right now to work apply DeFi to the real life, but truth is that increasingly a lot of the utility of banks are going away.

You can already borrow using collateral, enter into swaps, etc. with absolutely no middlemen on DeFi platforms. All these things you can already do, just think about what's possible in 10 years when DeFi actually matures.

Not literally, crypto can stand without having an actual bank. Though we need it somehow in dealing using P2P trades usually a personal Bank account is needed. Yet, there are still P2P traders allowing transactions using another virtual wallet. So yeah, Crypto have its own workaround that Banks have. So nah, even without banks crypto will still move.

it looks like a token sale on a project can be interpreted as a loan in fiat currency. Here the investor acts like a lender and the development team will use the funds to develop the project. it doesn't stop there, later after the project develops investors will benefit from the token sale. maybe the investor's profit can be interpreted as interest on fiat currency loans.

indeed without crypto banks can move as they are today, but we do not know what kind of crypto policy will be enforced in the future. we know the government plays an important role, where we cannot avoid the regulations that have been set. actually in crypto everyone has their own bank and must be responsible for the security of their wallet

We talked about banks for cryptocurrency earlier, before the advent of decentralized finance (DeFi). This is a relatively new direction in cryptocurrency, which can largely replace the functions of cryptocurrency banks with its smart contacts. Of course, we are not talking about banks in general, but about cryptocurrency banks. Almost all civil transactions that banks could make in cryptocurrency can be carried out using smart contracts. Crypto banks can of course exist as some kind of alternative to DeFi.

I haven't heard or know other platforms that accept crypto and can be converted to fiat and able to cash out to the bank. In my country there is an app like that where I can receive crypto and can convert crypro to fiat. I don't think banks have a lot of role in this one but what I think is it could be useful if the bank supported the app where we can deposit fiat and buy crypto lile binance for example.

Loan mechanism in crypto space is completely secured but not reliable because the only way to get loan in the crypto is by providing valid collateral which should be equal to the value of loan your are taking but we also can ask that why someone have to take loan when they can simply sell those cryptocurrency and make money.

It really doesn't look that impossible neither. There are few things that a bank can do that DeFican''t do just yet, like yeah we have lending there but not the way banks do have, banks give free money basically without expecting much, which is why they have such high default rates compared to past and yet they get bailed out so they do not care who they are giving loans since they will get it back one way or another. However, defi does cover so much of the regular banks situation.

A wallet, a good portfolio, some investments into yield farming and staking, you are literally set for life in your investment and your storage of value as well. There is really nothing else you may need. Give me 200k dollars right now and I could live with that forever ever needing to make any other money by working. That is what stock market and banks supposed to be, but defi took it all by itself and made it a lot better.

It’s possible to take loans in cryptocurrency, and this is something that has been working even before the idea of DeFi came out. There has been a few legit cryptocurrency websites that  allows you to take loans and it works the same way you’d take loans in the banks; you give something as a collateral, something that’s equal to the loan amount you’re about to take and later you can repay the money and then have back what you have given to them as a collateral. That’s the same way it works in the cryptocurrency ecosystem, if you want to take a loan you will have to give a collateral, though time around you’re using your cryptocurrency assets as your collateral.

Not needed, if we go into crypto then there is no need for third party services such as banks, with crypto all control is in hand, the presence of banks will only create dependence and they can use our money for business without notifying us and when we withdraw it takes a process Long story short, crypto doesn't need banks.

Implementing the lending feature in crypto is a not big deal which again does not guarantee that it will make banking system obsolete. Crypto will exist and fiats and traditional banking will exist to serve their own purposes until there would be some demand for these. I mean when no body prefer to use banks and fiats then it will be abandoned one day for sure.

Crypto can boom with our without banks; When time moves-on people will choose the better one and this way we could expect banks may not be needed for crypto users in near future.

There is nothing wrong with commercial banks would be taking clients' money into custody. Those who don't want to be responsible for their money, those who are not very keen to learn the basics of how to manage and store the keys to their bitcoin wallet would happily engage banks' services. In this case, banks are going to be no different from mere warehouses that take a small fee for giving you a space to put in your stuff. There will be free and fair competition between different banks-warehouses, which means it will be in their best interests not to play with their clients' coins.

In some very famous banks, they have put cryptocurrencies, the most common case that I always like to put it as an example is JP Morgan, because his clients were demanding that they could operate with crypto and he had no choice but to put it, Not without first mentioning that I didn't recommend it because BTC wasn't trustworthy. Likewise, in Spain, BBVA is managing to operate with BTC and cryptocurrencies, and not only for Spain but for all BBVA subsidiaries worldwide, to be able to enter with this service.

We've seen several banks that had integrated or adopted crypto but doesnt mean that it will really be letting users to be that anonymous or cant be known which simply means that you do still in line with rules and regulations by the institution itself which means it did really remove out the essence of decentralization thats why i do really cross out that kind of consideration because crypto shouldnt really be regulated
nor be ran off by centralized platforms/institutions or something like this.We dont need banks on the essence of anonymity and decentralization but still people do see the different way around
which it isnt surprising at all.

Actually, there are plenty of defi-projects that can give you loans with small APRs. One that I can think about off the top of my head is Poloniex, so you can check this platform if you are interested. One people deposit crypto and get interests, others can take out loans there, so everything works in the same mechanism as in ordinary banks.

Banks is not the right place to visit if you keep your identity anonymous as they will surely ask for the validity of your ownership and comply with KYC. Nevertheless, it gives us security assurance of our money which most crypto wallets couldn't have (aside from hardware wallets). If we worried so much about this thing, I guess banks are very important.

The integration of banks and crypto will help for a huge adoption. With their partnership, it becomes easier for the people to make a buy and use banks as their third party if possible and a secure transaction, unlike using non-reputed exchanger. I hope there is such realization and banks will become open to these changes.

There is no actual alternative to loans we are taking in banks when it comes to crypto and its one of the disadvantage in the decentralized economy but its good for the long term since we wre not going to be trapped in the credit and repayment cycle forever if we know how to manage the funds we have and spend it effectively.

The two are not in line with each other, crypto and bank are decentralized and banks rely on national entities with enforced costs to money via fixed interest rates.    To say crypto requires banks would be to have the whole system require politics for funding and survival.   If you want to interface crypto to FIAT trading then its going to involve banks within that exchange but the larger hope is crypto doesnt lean on dollars for an idea of value.

If we can do all bank functions ourselves then we no longer need banks, the presence of banks in crypto is an obstacle which I'm sure one day will apply strict rules for withdrawals, moreover we can send crypto with large or small amounts in just a few seconds, banks don't needed for crypto.

In terms of features that DeFi projects and Banks has, the twi has similarity. However, the collaterals are different. When you borrow in banks, you need physical assets like cars, houses or even property lots. In crypto, you also needs collaterals which is crypto assets that you have. My point is that, banks are institutions that has centralised system. It has vulnerabilities and strengths that rely on old monetary system. DeFi in the other hand is the future of banking. No more intermediaries. Only smart contract. So in short, crypto does not need banks. Banks needs crypto.

A special function of the bank is to turn the source of the money from the mysterious into legal and usable and to be able to replicate this functionality for crypto, we need government but the government might not be happy to give us permission for this function. Although the bank can hinder and exacerbate the principles on crypto but their regime still maintains equality and provides valid and safe funds as long as the scope and transactions of crypto are not disclosed to the outside, without licensing and conversion from a major bank, our crypto money is forever black money and must be operating illegally

Technically, banks may not have anything to do with crypto, because judging from the system they have developed, they are very different 360 degrees, where they contradict one another.
but in a crypto partnership it will not be separated from banks and fiat even though the influence is very small but fiat will still be in crypto forever because they are actually seen as a symbiosis of mutualism, namely mutual need between one another.

The sole purpose of crypto is to be your own bank if I'm not mistaken?

With the way you explained your side, there are similarities since both need collaterals, but banks still got the advantage since it
was the first option since many are relying with centralized system

But in due time, when more people embrace crypto, the advantages will be slimmer. DeFi is introducing how crypto will help
and for those who will take time to understand will enjoy the benefits.

That is basically what defi means. It is decentralized FINANCE, which means it is trying to do the absolute best in that regard and I believe it could definitely do that in the future as well. Sure there are some features that we are missing right now, but that doesn't mean that we are going to never have them. Eventually one by one there will be more and more products that will replace banks.

One day we are going to have projects that replaces banks from our lives all together. Cards are the most hard part, it is hard to make cards that are accepted all around the world. However we are going to basically slowly and gradually that will end up with something that is as close to banks as it gets. I hope that it will happen very soon, in a few years, but at the same time it doesn't mean that we should be expecting others to fill the void we want filled.

the problem of most DeFi platforms is the credibility and the longevity of their business. as we have seen, a lot come and go already, abandoned, shelved, whatever you call it. and only few can really be trusted, but still, you have no idea if they can survive or will still be here after 5 years or so. so that's the big difference for me. traditional banking is still preferred because they already established their financial system and you have no worries about their disappearance. because if they are going bankrupt, you will know it before hand. but with defi, if they want to disappear, they can, even without informing their clients.

The functions of the banking system are much broader than just making payments in fiat currency. Ideally, banks are enterprises that accumulate financial resources and carry out various actions with these funds in order to earn more. It has also long been the custom that the state is more accustomed and convenient to conduct its monetary policy through the involvement of banks. Therefore, when they say that cryptocurrencies can make the banking system unnecessary, this is an overly optimistic and greatly simplified view of things. In any case, banks will remain as enterprises with financial specialization and, in addition to financial actions with fiat currencies, banks can conduct the same operations with cryptocurrencies.

The presence of cryptocurrencies no longer requires the services of third parties such as banks, cryptocurrencies are safe and fast transactions that can be done in a few seconds, and most importantly high security because we store in our wallets it is almost impossible to hack.

I actually think that in the future it will be very easy to find secure crypto lending services in various applications.  And I have a guess in the future, e-commerce around the world will start looking at crypto as their payment.  Because if I pay attention to the development of e-commerce in my country, I have tried all lines of business.  At first it was only a third party that brought together merchants with buyers, there are already many services offered in one application.  to provide loans for shopping and so on.  So what is currently untouched is Crypto even though this is a sexy market.

We have very many features which should be focused on besides lending and borrowing. Yes, it depends on everyone's need. I feel much comfortable with current crypto features. Blockchain technology has been the best and secure enough to opt and use. Depending on a 3rd party is out dated to be frank. We have everything in hand to just experience hand in hand here in crypto. Feel much secured.

If loaning requires a real world collateral then I would loan in non-crypto platform since the goal being anonymous or personal info free is defeated rather than loan in crypto platform which your identity can be link to other your crypto space.

Thank you friend for reminding me an important point that I almost forgot. because it considers fiat and bank to be the same but basically fiat is a component of the bank itself.
but apart from that it's all in line with what you said that sanya is too optimistic and indeed very overconfident when it comes to saying that crypto can live without banking and can even replace it.
at least I still hold fast to the belief that I believe that even though crypto and banking cannot be combined but in this case it doesn't mean we have to choose one and leave the other because I live between the two.

Bank and crypto is a difficult thing to put together, the presence of a bank with many conditions and difficulty to withdraw and fees for large transactions are certainly not expected by crypto users, we are in a different era that no longer needs banks to control our money, this is the modern era so banks are not needed in crypto.

Even though that doesn't mean banks aren't necessary in life.
We certainly already know that the function of the bank is for what, apart from the rules and system imposed by the bank, we cannot eliminate banking in life because it is related to the existing economic system.
crypto is indeed very good but that doesn't mean we only live from crypto, at least we have to be realistic that in real life the role of fiat and paper money is still a vital tool in payments.

Define "needed", and we could have an answer. I mean surely it is not "needed" in the sense that we do not have to have it, we could handle p2p and swaps and so forth and make due, we will not be forced to use them. However do they make it easier? They really do, I still pay fiat wherever I go, so I need fiat in my bank account, I could use p2p when trading if I want to, but using Binance and withdrawing to my bank account directly makes things a lot easier to be fair.

So, I have to say that things are looking amazing for banks now because they make things easier. You are not forced in any way or shape, so they are not "needed", but still it is definitely not a bad thing neither.

DeFI could exist or become a trend but doesnt mean that we wouldnt really need any service that came from Bank.Of course there are services which banks are only able to do so.

Yeah, decentralized finance is good but doesnt mean that it will really overtake or could patch up on what centralized institutions could do.
We do still need them even some people doesnt like them or not.Lets just bare these benefits that we do get from this new tech/services/platforms.

we really have to be able to live realistically with the existing conditions and situations that occur. we will still need a bank, because every transaction will be converted to fiat to be able to shop for the necessities of life. On the other hand, banks without crypto are actually not a problem for them, because banks are protected by a big power, namely the government

Talking about money lending, there are lots of platforms here that lends money to people in the cryptocurrency community. Maybe the way they function may be different from how banks functions, but it’s still the same service that they’re offering. This is a system that doesn’t require banks to operate.

When it comes to cryptocurrency everyone is in charge and manages their finance, now whatever business you’re doing with anyone , you’re doing it directly with them, and there are no middle men needed for any form of transactions. So, banks are not needed at all.

Indeed, that is why I invested in crypto in the first place. People think it is great to entrust their money to a third party, but I prefer it being my own money and not being risked to someone else's hands.
Right now, the "advantage will be slimmer" ain't not going to happen if people still see crypto to being something to make rich overnight.

For now, yes we need banks for cryptocurrency usage. I mean that we can of course use cryptocurrencies as a payment method wherever it is available. However, we don't see that the majority of the places accept cryptocurrencies. Until then, we will need banks and fiat to convert our coins to fiat and use it for payments in most of the places. But in the future, I think that we will see the days too that we will not need fiat and banks.

As far as I know Binance phone application gives an opportunity to put your crypto on deposit. It is very nice and interesting option and it really works fine. Binance also gives an opportunity to take loans in crypto: https://www.binance.com/en/loan  . Probably other exchanges also give loans in crypto. However I believe that credits in crypto, it’s very risky business. 

Banks and cryptocurrency are difficult to put together. In my opinion, I could say that cryptocurrency don't need banks because crypto has a strong security unlike banks. I think also that banks don't need cryptocurrency but it needs the blockchain technology to see every transactions in banks. But, I guess if they put together, the security system will be more stronger and a lot of things would be better, so, it would be an amazing thing.

There is a thing such as crypto loan but it isn't widely used I think because it is much more complex than loans made in fiat. You see, cryptocurrencies' natural state is volatile, meaning the prices vary depending on what season we currently are, the time for today, and of course the external factors such as news, legality and the likes. When you plan to make a loan in crypto, you should know the basics and the terms of services so that you won't be shocked later on.

In crypto, when you want to loan, there is a collateral same with loans in fiat. Only that, collaterals in crypto is crypto as well and not properties unlike in fiat. You can only borrow if you are a verified user and if you are qualified to borrow. So in this instance, it isn't for those people who are not fond of KYC. The calculation of interest whenever you loan (in Binance for example) is hourly. Any amount of coin that you borrow will have its interest per hour. When you borrow it for less than an hour, the interest is still counted as an hour.

The collateral damage in crypto loans work the same way in fiat. If you will not be able to pay to the supposed date of repayment, they will liquidate your funds. Just like how the banks get your properties the moment you fail to pay on the agreed date of loan payment.

As of now, I don't think crypto loan will be a big thing or will happen soon because like what i have said, it is complex. Given the price fluctuations of crypto, the chances are 50/50 of benefiting and not. Although there are platforms that are doing it now, I don't think it will be patronized as much because it is riskier compared to trading or investing.

Loans in the world of cryptocurrencies will most likely work in a way similar to the way they worked for a long time, basically you will need a collateral to get a loan, this means that many people will not be able to obtain loans, but is it not that the case already with the traditional economy? And while some may think it is unfair it is not, a great deal of the loans today are given for consumption and not for anything productive by itself, and it is one of the reasons why the economies of the world are in such a huge trouble, so a return to a more simple system will be welcomed by me at least.

Well if privacy and anonymity are concerned you are absolutely right, at that moment it begins to end and it is no longer the same, however there are people who have never worked or handled BTC or cryptocurrencies, and for them it is easier to trust one banking institution to indulge in the adventure of reading and learning because much more would be achieved.

The positive aspect that I rescue is that those who buy BTC or crypto in a bank, is an increase in demand in the BTC market and there are those people who were never going to enter on their own.

in the traditional banking system there are some loans that are unsecured, such as credit cards, where we are fully responsible for our good name to a particular bank, and this does not require collateral. while in crypto we see in several exchanges that bring up images of master cards

The only way to have  Loan mechanism here in crypto is with collateral in which you need to provide something more valuable than the amount you wanted to take as loan and because there are no assurance at all that we will receive payment from the loaner incase there are no collateral offered.
we have seen so many scamming happens here even the most trusted accounts becomes scammer because of a Non Collateral loans.

Banks already exist from the very beginning without crypto. I don't think if one day banks will adopt and accept cryptocurrency on their platform because banks is centralized while crypto is decentralized. Crypto is more secured than a banks and in crypto, you have full control with your assets unlike in banks that there is a third party.

Yeah I know but I was talking about the past, credit right now is easy, everything can be bought on credit, after all if you can cover the price of what you want to buy with a credit card then you are making a purchase using credit, however in the past this was not the case, you could not get a loan except for productive endeavors, and I think it is time we go back to that as it is obvious that people cannot manage their credit well and banks are taking advantage of them with all of those unsecured loans.

,actually between bank loans and cryoto have similarities. However, crypto transactions do not require trust. Digital tools and breakthroughs such as smart contracts make them paperless, no need for complicated authorizations and repeated checks when transacting with crypto, just like making loans. Therefore, crypto loans can be processed in seconds to minutes, you can also choose loans with DeFi or CeFi schemes.

You and I technically knows that banks are very much needed in cryptocurrency otherwise, majority Wil just be hearing of Bitcoin and ethereum and wouldn't be able to do much or purchase.
Unlike people that are closer to Stable coin OCT like Tether that can easily Mint Usdt with fiat and buy their desire coins.
Banks are needed to switch between two world, you need bank to transition your value from fiat into cryptocurrency and hence they are needed for now, may be things might change in the future.