What are the likely problems that cryptocurrency poses to the financial sector?

[EriksonPartners]

Some say it doesn’t really pose any kind major threats to the financial system, since it’s too unstable to be accepted as a regular currency. However, others say it will totally disrupt the current model. What do you guys think?

[dothebeats]

As of the moment, bitcoin and cryptocurrencies don't pose a major threat to the financial system we currently have as the people are really not into it yet. Once people knew that bitcoin is a possible workaround for slow and expensive wire transfers, people will do the switch, and perhaps will be doing it not only on transfers but also on purchases etc. should cryptocurrencies find its stable value (that is entirely questionable at the moment.) Most are still associating crypto with illicit activities, and the banks and the media are doing a great deal in keeping that story intact by producing content and articles that emphasizes the weak nature of cryptocurrencies as opposed to the banks and fiat.

[OlympianBitcoin]

The biggest problem the crypto poses to the financial sector is that it offers save haven during a financial crisis. No more total control over the flow of the money for the old guard. So perhaps a new shuffling of financial cards will be possible

[Indamuck]

It will definitely steal market share away from banks and fiat money.  This is why people like Warren Buffet are against bitcoin, he is a large shareholder in major banks and credit card companies.  Paypal has been heavily against bitcoin because they know how much business they can potentially lose to crypto payments.

[avikz]

Some say it doesn’t really pose any kind major threats to the financial system, since it’s too unstable to be accepted as a regular currency. However, others say it will totally disrupt the current model. What do you guys think?

Everything has a positive side as well as negative side. Cryptos are no exception. The fluctuation in crypto price is a real challenge for businesses to accept it as a regular currency. Beside government regulation, this fluctuation is the biggest challenge in crypto.

But I don't think that existing cryptos have the power to disrupt the current financial or economic model. It would certainly bring some changes in the current model but disrupting is out of question. In a nutshell, I don't think crypto poses any significant risk to the current economic model and it will co-exist as a parallel economy!

[Bravext]

Bitcoin and Cryptocurrencies in general poses a very huge risk to the current financial sector because presently banks are heavily relied on for financial transactions and they charge a money to do this, but Cryptocurrencies put the power of transaction confirmation in the hands of miners, if Cryptocurrencies are adopted worldwide, the banks would go out of business fast.

[Ezenwanyi1]

We all know the challenges being faced by bank customers these days.
Challenges ranging from high transaction fees , the hidden charges, high interest rates and difficulties associated with obtaining credit facilities.etc
Bank customers are stuck because there's no other alternative.
So, assuming cryptocurrency becomes generally accepted as a payment medium, I believe most bank customers would do away with the banks with reckless abandon.
And this would pose a great threat to the continuous growth of the banking seector.

[Stac]

 The common topic spoken  by everyone.when coming to cryptocurrency is that cryptocurrency will make the banking system to obsolete . Even though the current banking system is a flaw and has to be corrected that is not easily repairable A good central bank should be able to avoid hyperinflation and economic depression and should sustain a steady economic growth with slow rate of  inflation .In most developed  countries also it is difficult to do so since they use their power for their own financial interest only .and when people lose trust. over this centralized one there the decentralized currencies can solve all these problems since hyperinflation is not a threat.

[Welsh]

It would definitely cause fear in the wire international business, it does everything the bank can but better. (Except for reversal)

Reversal could be viewed as either a good thing or a bad thing. It's a well known fact that services such as Paypal are notorious for scammers charging back their payments, and running away with both the product, and money. Paypal generally favors the buyers over the sellers, and this is especially the case when buying digital goods. It's the exact reason why you should never trade Bitcoin for Paypal, unless you're dealing with a very trusted user, and honestly even then there are better ways. The only thing that Paypal has over Bitcoin is convenience.

[pooya87]

i think the first thing that you need to discuss about is that why do you think bitcoin should even  disrupt anything in first place? for example imagine a fast food that opens up on the other side of the street with a better menu than the old one, this new one doesn't "disrupt" the old one, it has just added more fierce competition and if the old one is shitty it will be removed unless it stops sucking.
that is what bitcoin is, that alternative that was created because the fiat system was shitty and it is not about to replace it unless it continues to suck.
and remember that bitcoin is here to solve problems not cause any, if you see some problems, know that they existed before bitcoin. with bitcoin they only became more obvious.

[libert19]

Cryptocurrencies are pseudonymous so it might be trouble for taxation agencies to track down and tax individuals.

[Beerwizzard]

that is what bitcoin is, that alternative that was created because the fiat system was shitty and it is not about to replace it unless it continues to suck.
and remember that bitcoin is here to solve problems not cause any, if you see some problems, know that they existed before bitcoin. with bitcoin they only became more obvious.

Our economy should collapse that much that we should get back to the stone age.
In the modern world, people only use cryptocurrencies if their economy is totally dead and the annual inflation is higher then Bitcoin can loose. So if you are not resident of Venezuela or the other communistic country then you probably won't see see BTC as one of your main currencies.

[thefoex]

very free and it will be very disturbing during a financial crisis. countries cannot control because cryptography is decentralized. because of this many countries do not agree if cryptocurrency is legalized. crypto can also cause inflation, the more someone holds a coin then he can do anything on the market.

[kryptqnick]

Some say it doesn’t really pose any kind major threats to the financial system, since it’s too unstable to be accepted as a regular currency. However, others say it will totally disrupt the current model. What do you guys think?

Everything has a positive side as well as negative side. Cryptos are no exception. The fluctuation in crypto price is a real challenge for businesses to accept it as a regular currency. Beside government regulation, this fluctuation is the biggest challenge in crypto.

But I don't think that existing cryptos have the power to disrupt the current financial or economic model. It would certainly bring some changes in the current model but disrupting is out of question. In a nutshell, I don't think crypto poses any significant risk to the current economic model and it will co-exist as a parallel economy!

Fluctuation is a challenge, but maybe it won't be such a problem when more people use cryptocurrencies. I think that more usage means less fluctuations due to smaller impact of panic sellers on the general situation. And as for disruption, it might be just a matter of time. When the best fiat like USD and EUR fails, people will be tired of regulations and risks or inflation, so cryptos will be the first thing to turn to. If scalability issues are solved by then, I think cryptos can truly become a game-changer.

Cryptocurrencies are pseudonymous so it might be trouble for taxation agencies to track down and tax individuals.

Firstly, some are not pseudonymous, and secondly, one might require enterpreneurs to decrare their crypto addresses they use for business, and thus easily track crypto for tax purposes. Sure, one might use another account for some part of business and not pay taxes, but people find their ways to avoid paying taxes without cryptos as well.

[gabbie2010]

Some say it doesn’t really pose any kind major threats to the financial system, since it’s too unstable to be accepted as a regular currency. However, others say it will totally disrupt the current model. What do you guys think?

The sector that is most threatened is the banking sector of the financial system.
Cryptocurrencies featured store of value provides a well secured alternative means of storing fiat in form of Cryptos could pave way for diverting investors to withdraw their fiat to Cryptos which also features anonymous transactions, although Cryptos is not ripe enough to be deployed as a regular currencies however it indeed threatens the financial sector of the economy.

[peter0425]

Perhaps it can affect on the global remittances and this is a billion dollar business so most likely financial sectors are afraid that crypto will disrupt them in a negative way, like cutting in their huge profits so to speak. Just imagine people sending money to their love ones without the bank involved, that's is a scary thought for bankers out there. 

[hulla]

Perhaps it can affect on the global remittances and this is a billion dollar business so most likely financial sectors are afraid that crypto will disrupt them in a negative way, like cutting in their huge profits so to speak. Just imagine people sending money to their love ones without the bank involved, that's is a scary thought for bankers out there. 

In support of your message.
I don't see crypto currency poses any problem since it a decentralized like platform and it controlled by the community but the bankers and government have read Bitcoin concept which is why the bankers and the governments are scared that crypto currency could take their place in terms of power and profits. An example bitcoin taking tge place of chinese national currency was the reason why the Chinese governments says FUD things about Bitcoin

[aprilnot]

I think there are many, one of which is market manipulation, money theft, and tax evasion. because of this many governments do not agree to crypto being used in their countries. decentralization and anonymity like a double-edged knife, on the one hand are good advantages. but on the other hand this can be misused.

[mensahkkofie]

The world of cryptocurrencies seeks to give financial freedom to people but the financial sector dont see this as feasible due to the high volatility of the crypto market and this is the greatest challenge since they have to do anything possible to prevent mass adoption of crypto. The financial industry is basically controlled by centralised figures like the world bank, IMF, central banks of countries etc. On the other hand, the world of cryptocurrency where everything is virtually anonymous and decentralized.  Hence if there is mass adoption of cryptocurrencies they believe it would totally disrupt the existing financial sector.

[cryptomaster420]

Some say it doesn’t really pose any kind major threats to the financial system, since it’s too unstable to be accepted as a regular currency. However, others say it will totally disrupt the current model. What do you guys think?

Not the financial sector per se, the central banks that determine economic cycles, devalue all our earnings through inflation and probably have more control over our lives than our presidents.
Bitcoin is a continuation of the end the fed movement.
And you might wanna read up on what message Satoshi signed as he started the Bitcoin mainnet.