Effect of Bitcoin on Bank Deposits and the Economy

[jaaeeeyyyy]

It will decrease the amount of money deposited on banks because some people will going to convert ther fiats into virtual currency which is safe and you would have the control over your money and so the economy's fiat usage will decrease also but there is an adverse effects such as the increasing of cryptocurrency on a particular country and helps the economy to increase its rate.

[AVAMONEY]

Banks are centralization whereas Bitcoin is not. Of course will not affect each other. If any later many people are more interested in saving money in the form of bitcoin, of course the velocity of money in the community becomes less. This can lead to inflation, basically this is the form of regulatory obstacles from the government itself where the money of society will be many are outside the region.

[drachman]

Say cryptocurrencies take off and people hold more of their savings in crypto instead of bank deposits. Currently everyone's savings is in bank accounts which is being lent out to businesses and hence stimulating the economy. What is going to happen if bank deposits drastically decrease?

On the one hand, maybe it will not have much effect on the economy because since lending will become tighter, businesses will need to justify the loans more (vs. if there is easy access to money) and will create stronger proposals. On the other hand, could it have a detrimental effect on the economy?

The amount of money that banks can create will diminish, the government will need to begin to print that money to keep banks from bankrupting and this in return will create inflation and and a greater mistrust in governments and banks creating a self sustaining loop.

[MMA]

It will decrease the amount of money deposited on banks because some people will going to convert ther fiats into virtual currency which is safe and you would have the control over your money and so the economy's fiat usage will decrease also but there is an adverse effects such as the increasing of cryptocurrency on a particular country and helps the economy to increase its rate.

Yes that is very right and specially in modern world people are now taking more interest in bitcoin and other  online currencies and therefore they will avoid banks to deposit their money there. but i think that when states will start accepting bitcoin as legal currency then banks will also start accepting bitcoin and through this will bitcoin will surely survive.

[ricardobs]

It will decrease the amount of money deposited on banks because some people will going to convert ther fiats into virtual currency which is safe and you would have the control over your money and so the economy's fiat usage will decrease also but there is an adverse effects such as the increasing of cryptocurrency on a particular country and helps the economy to increase its rate.

I don’t really think so. Bitcoin doesn’t reduce the amount of money that is being deposited in banks. You’ve all forgotten that Bitcoin is just a digital, and the companies that runs Bitcoin has a bank that manages their account. So I believe when the money is sent, it gets deposited in the country’s bank account.

[armansolis593]

Say cryptocurrencies take off and people hold more of their savings in crypto instead of bank deposits. Currently everyone's savings is in bank accounts which is being lent out to businesses and hence stimulating the economy. What is going to happen if bank deposits drastically decrease?

It depends on how many percent it decrease on a country or worldwide, lets say that in a certain country bank deposit has lessen and people there do invest their money into crypto currency.

Banks will need to find a good investment for their depositors money so that they can pay for all the expenses that the company is needed if not, they will just have to apply a bankruptcy and the main bank that regulates the network of bank in that country will start to investigate why did it went bankrupt, and along their investigation leads to people doing crypto currency, actions will be taken by the government.

On the one hand, maybe it will not have much effect on the economy because since lending will become tighter, businesses will need to justify the loans more (vs. if there is easy access to money) and will create stronger proposals. On the other hand, could it have a detrimental effect on the economy?

The effect will only take place if almost all of the people living in a particular country is on crypto currency, effects may vary on different situation that a country is facing, economy wise it wont affect much as people pay taxes to the government from daily necessity they bought everyday to annual income tax.

[ewant57]

Бeз cпopнo влияниe биткoйнa нa экoнoмикy бaнкoв cкopo бyдeт oщyщaтьcя, кaк тoлькo y ниx нaчнeт нe xвaтaть лeквиднocти oни бyдyт лoпaтьcя. Boт тoгдa бyдeт жapкo. Пoкa eщe мнoгиe дepжaт дeньги нa дипoзитax, тaк кaк нe вepят в биткoин, cкopo вcё измeнитьcя.

[prospect 20]

It may have an impact especially for the unemployment rate in a certain country wherein the unemployed may have the chance to earn and profit through involvement of bitcoin.

[joebrook]

Say cryptocurrencies take off and people hold more of their savings in crypto instead of bank deposits. Currently everyone's savings is in bank accounts which is being lent out to businesses and hence stimulating the economy. What is going to happen if bank deposits drastically decrease?

On the one hand, maybe it will not have much effect on the economy because since lending will become tighter, businesses will need to justify the loans more (vs. if there is easy access to money) and will create stronger proposals. On the other hand, could it have a detrimental effect on the economy?

Whiles Bitcoins is going to make it's investors rich meaning anyone who buys and hold will get some good profits but when it comes to banking, its only the bankers that get rich because they use their customers for their own business and what makes the economy of a country grows is when people buy and sell a lot. Because with every purchase the government make money with taxes that are paid.

[sana gull]

It will decrease the amount of money deposited on banks because some people will going to convert ther fiats into virtual currency which is safe and you would have the control over your money and so the economy's fiat usage will decrease also but there is an adverse effects such as the increasing of cryptocurrency on a particular country and helps the economy to increase its rate.

Currently i do not think that it has such a bad effect on banks or economy instead it turn the economy of some countries as more better because bitcoin is reducing the unemployment number of people. in future we can expect that bitcoin will even increase the efficiency of banks and will continue increasing the economy of the people and countries.

[Kevin77]

Say cryptocurrencies take off and people hold more of their savings in crypto instead of bank deposits. Currently everyone's savings is in bank accounts which is being lent out to businesses and hence stimulating the economy. What is going to happen if bank deposits drastically decrease?

On the one hand, maybe it will not have much effect on the economy because since lending will become tighter, businesses will need to justify the loans more (vs. if there is easy access to money) and will create stronger proposals. On the other hand, could it have a detrimental effect on the economy?

Logically bank deposits can increase if you assume bitcoin investments and savings are substitutes. I think that the relationship isn't nearly as strong as you feel. Mostly people invest a much smaller amount than they save. But less deposits in turn could lead to banks needing to put up interest rates to encourage saving.

I do strongly believe with whatever you say. Bank deposits do not affect much due to bitcoin transactions. Almost each bitcoin transaction is made with respect to the bank account and also it helps the bank to maintain a good interest rate on the amount of money the account has. I think, it is much profitable for both banks as well as the individual selling bitcoins.

I don’t think bitcoins have much impact on the bank deposits. Yes bitcoins can surely help the nation to grow its economy as the more number of people's will earn bitcoins to more economic rate will go high. If there is a nation which has each individual in the country related to bitcoins than each individual there will earn a good number of profits each day and the nation will then become the richest nation soon.

[JTEN18]

It is like the usual. Banks will still earn profit from withdrawals and other transaction involving crpytocurrencies. The only thing I think that will affect banks is the reduce of investments or savings at them. If this continued to go on, then banks might recognize the bitcoin as part of their operation as also part of the growth of cryptocurrencies around the world. Through the economy, I think it will reduce employment as what we all know that you can earn in Bitcoin. Unemployed people can earn their part time in here by offering their services according to their skills.

Since people has already earned thru bitcoin or other cryptocurrency, bank has been actually grow and had increase its depositors due to this kind of industry, so if it has an effect and that is the effect of increasing the economy, so crypto really has a positive effect for all of us.

[newbie-hero]

Say cryptocurrencies take off and people hold more of their savings in crypto instead of bank deposits. Currently everyone's savings is in bank accounts which is being lent out to businesses and hence stimulating the economy. What is going to happen if bank deposits drastically decrease?

On the one hand, maybe it will not have much effect on the economy because since lending will become tighter, businesses will need to justify the loans more (vs. if there is easy access to money) and will create stronger proposals. On the other hand, could it have a detrimental effect on the economy?

I do not think that bitcoin will have a negative effect on the banking system, which will lead to a reduction in bank accounts. Just people will use bitcoin as gold as an asset to multiply their money.

[Similificator]

Say cryptocurrencies take off and people hold more of their savings in crypto instead of bank deposits. Currently everyone's savings is in bank accounts which is being lent out to businesses and hence stimulating the economy. What is going to happen if bank deposits drastically decrease?

On the one hand, maybe it will not have much effect on the economy because since lending will become tighter, businesses will need to justify the loans more (vs. if there is easy access to money) and will create stronger proposals. On the other hand, could it have a detrimental effect on the economy?

Great question you have there pal, have been askijg myself the same question for quite some time also, but it think i get it now. You see, what i thought was this is gonna be impossible to happen. You know why? Because the governments will adapt together with the banks, one way or another, they will find ways to attack crypto people. And then the crypto world. Because they have already thought about this question also. And clearly, there are a lot of spies here observing everything and devicing a plan to tyrn the tables and make the governments and banks have the most benefits from this new trend. This will either fuse fiat and crypto or destroy the whole crypto world as a whole. Either way, it won't be good for any of us crypto users and lovers.

[Don Pedro Dinero]

Say cryptocurrencies take off and people hold more of their savings in crypto instead of bank deposits. Currently everyone's savings is in bank accounts which is being lent out to businesses and hence stimulating the economy. What is going to happen if bank deposits drastically decrease?

On the one hand, maybe it will not have much effect on the economy because since lending will become tighter, businesses will need to justify the loans more (vs. if there is easy access to money) and will create stronger proposals. On the other hand, could it have a detrimental effect on the economy?

You are basing your argument on a wrong assumption. Bank deposits and bitcoin are totally different types of investments. People holding bank deposits tend to avoid risk and don’t care about high returns. Those people who have historically preferred bank deposits could have invested in risky stocks and they didn’t. Why are going to switch to bitcoin now?

The switch is mainly from stocks to cryptos but not from bank deposits.

[NicG13]

So far banks have seen a surge in activity and fees off the back of the cryptocurrency boom. The economy in Japan has had a .5% growth because of all the crypto activity.

[ngavanngo22]

The impact of Bitcoin on the bank as well as the financial industry in the future is inevitable if Bitcoin, as well as the cryptocurrency, are accepted as legal currency. Because offline currency will be completely replaced by the cryptos at that time. The economy will be affected and changed quickly.

[drachman]

Say cryptocurrencies take off and people hold more of their savings in crypto instead of bank deposits. Currently everyone's savings is in bank accounts which is being lent out to businesses and hence stimulating the economy. What is going to happen if bank deposits drastically decrease?

On the one hand, maybe it will not have much effect on the economy because since lending will become tighter, businesses will need to justify the loans more (vs. if there is easy access to money) and will create stronger proposals. On the other hand, could it have a detrimental effect on the economy?

I do not think that bitcoin will have a negative effect on the banking system, which will lead to a reduction in bank accounts. Just people will use bitcoin as gold as an asset to multiply their money.

It will have a negative effect believe me, that is why they are against bitcoin, bitcoin can suck an almost unlimited amount of money and that will be money no longer in the fiat system, governments will print more money but this is going to create inflation and more people will put money in bitcoin.

[joan26]

I think there have been implications that Bitcoins can be used to secretly launder money outside the country. Central banks across the world have been wary of Bitcoins as an uncontrollable and unpredictable form of currency. Cryptocurrencies are leading to loopholes in the current bank’s data about the money transactions leading to inability to track economic activities. Crypto and Cyberspace has emerged as a power in itself thus bringing a check on the activities of the so powerful governments.