Can Bitcoin Be the Saving Grace for Ailing Banks?

[cheezcarls]

Bitcoin began as the enemy of the banks, a new tool to bring traditional finance to a halt. However, as the cryptocurrency permeated the mainstream, it has become clear that the path for Bitcoin adoption is through financial regulation. But, does that mean that this decentralized digital asset can become the savior of the banks?

A bill in Germany, having successfully passed through the Bundestag, the German federal parliament, is suggesting that traditional banks should buy, hold, sell and trade cryptocurrency. This could be a big step in helping struggling banks resurrect themselves.

Read here for the full news

For so many years, banks think that Bitcoin and other cryptocurrencies are their enemies and the biggest threats of the financial ecosystem. Lots of them aren't allowing crypto companies to open bank accounts, or even existing ones are being forced to close their accounts.

Crypto banks are on the rise, slowly but surely. Now that people are slowly transitioning to put their money in Bitcoin and other cryptocurrencies than in banks, it is clear that this is the future and no one can stop it. If these banks are still against it, they would be left behind.

But good thing that there are other banks who embraced Bitcoin, cryptocurrencies and blockchain.

As the old movie saying goes, "Either you're with us, or against us!"

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[sovie]

On November 29, 2019, the German Parliament passed a bill which amends an existing anti-money laundering directive to allow German banks to both sell and store cryptocurrencies. The new law will take effect January 1, 2020, though certain requirements must first be met through the country's financial regulator
https://thetokenist.io/germany-passes-law-enabling-banks-to-store-cryptocurrencies/

Governments are not willing to accept crypto in its unregulated form, they will regulate it in order to use them in there regime. A regulated currency wont be a cryptocurrency.

[TheUltraElite]

I still think bitcoin and banks can complement each other.

Both are designed for a different purpose - bitcoin for the generation that wants censorship-resistance, somewhat untrackable mode of payments while banks allowing fiat - for the generation that is not willing to go to much into the technical aspects and dont bother about government censorship.

Banks may have taken a stern policy not just in Germany but many others too which have come up in the recent news. Still there is chance that in future bitcoin becomes a force to be reckoned with and banks may change their stance.

Blockchain technology is being developed in many IT companies, soon enough bitcoin usage will follow and governments will be forced to accept it than use a centralized crypto.

[electronicash]

banks will try find some ways that they'd still be used by people despite the fact that the wallet itself can function like a bank already. so what does the bank do again this time, they will still ask money for storing your coins to them?

although there will be users who will be embracing banks to also accept cryptocurrency deposits, it will really be unlikely for the people to use banks especially the ones who knows why satoshi created BTC.

[avikz]

banks will try find some ways that they'd still be used by people despite the fact that the wallet itself can function like a bank already. so what does the bank do again this time, they will still ask money for storing your coins to them?

although there will be users who will be embracing banks to also accept cryptocurrency deposits, it will really be unlikely for the people to use banks especially the ones who knows why satoshi created BTC.

I don't think banks will start accepting crypto deposits! The German parliament suggested banks to use cryptos for their own reserve fund and also to participate in the crypto market to generate income! But it's highly unlikely that banks will start accepting crypto deposits from the mass!

There's no issue in embracing cryptos in mainstream banking system, but there will be strong protests from the banking fraternity! It's not always easy to embrace your strongest enemy!

[mobnepal]

Crypto banks are on the rise, slowly but surely. Now that people are slowly transitioning to put their money in Bitcoin and other cryptocurrencies than in banks, it is clear that this is the future and no one can stop it. If these banks are still against it, they would be left behind.

Most of the crypto banks these days are attracting their customer through high returns on their saving which might got really low when there will be more people willing to lend their money to traders. Majority of borrower in those crypto lending platforms or wallets are traders who want funds to trade with leverage and are happy to pay high interest for short term loans, those loans are not like long term bank loans therefore those high interest rate can't stay for long time.

Crypto banks can or never will be able to provide similar long term loans as they can't compete with interest rate banks are providing.

However yes regulation will help crypto to get better adoption right now.

[piebeyb]

yes, and even then if the BANK is aware of wanting to hold bitcoin and blockchain, but if they continue to consider bitcoin as an enemy I feel strange, why not just stop this dispute so that it is easier to work together for a better future, where all crypto users can more comfortably store their money is in bitcoin and kept by the BANK, why not, I believe bitcoin is able to save ailing BANK

[Kprawn]

Blockchain technology will be the saving grace for struggling Banks.  The Banks quickly realized that Bitcoin was a disruptive force, so they

adapted to the threat by developing their own centralized Blockchain based technologies. The R3 Blockchain consortium are working on a enterprise

blockchain technology solution. They are building  distributed applications on top of Corda (known as CorDapps) for usage across industries such as

financial services, insurance, healthcare, trade finance, and digital assets. Source : https://en.m.wikipedia.org/wiki/R3_(company)  You will soon see

a host of Banking services using these technologies.  

[electronicash]

banks will try find some ways that they'd still be used by people despite the fact that the wallet itself can function like a bank already. so what does the bank do again this time, they will still ask money for storing your coins to them?

although there will be users who will be embracing banks to also accept cryptocurrency deposits, it will really be unlikely for the people to use banks especially the ones who knows why satoshi created BTC.

I don't think banks will start accepting crypto deposits! The German parliament suggested banks to use cryptos for their own reserve fund and also to participate in the crypto market to generate income! But it's highly unlikely that banks will start accepting crypto deposits from the mass!

There's no issue in embracing cryptos in mainstream banking system, but there will be strong protests from the banking fraternity! It's not always easy to embrace your strongest enemy!

not allowing deposits is good. it doesn't sound like banks already but that's good. banks participating in trading will be cool, that means they will also be holding coins as reserve funds. i'm not sure how they get these coins for reserve funds if not thru the deposits from the mass. i'm thinking the people deposit fiat/cash and those cash are going to be used to buy coins.

banks are going to embrace crypto, they don't have a choice but to embrace the technology. crypto users however are trying to get away from banks.

[blckhawk]

They could not totally prohibit Bitcoin because total ban is almost impossible. Acquiring Bitcoin and other cryptocurrencies is quite easy through unregulated exchanges. And if ban is implemented, demand for it might rise which would further increase Bitcoin's price.

I don't see it as saving grace too for them. It might aid them for awhile but personally, I think people would just trust exchanges more than banks that would monitor their purchases. Even worse, they might advertise cryptocurrencies aggressively to innocent ones without them knowing of its volatile nature.

[1Referee]

Acquiring Bitcoin and other cryptocurrencies is quite easy through unregulated exchanges. And if ban is implemented, demand for it might rise which would further increase Bitcoin's price.

I don't think it's actually that easy to buy crypto through unregulated exchanges, mainly so with how they quite often do not offer fiat deposits/withdrawals.

Most of the current unregulated exchanges are usdt exchanges, and there just isn't an easy way to exchange your fiat for usdt to then have it be sent to an exchange to buy Bitcoin with.

Having an exchange with bank accounts to accept fiat deposits is quite crucial. When that's no longer an option, the flow of fresh money into this ecosystem stagnates and that eventually will lead to less demand. This is also why exchanges such as Coinbase will do everything they can to please the banks they have accounts with, as so, these banks largely dictate Coinbase's policies.

[virasog]

On November 29, 2019, the German Parliament passed a bill which amends an existing anti-money laundering directive to allow German banks to both sell and store cryptocurrencies. The new law will take effect January 1, 2020, though certain requirements must first be met through the country's financial regulator
https://thetokenist.io/germany-passes-law-enabling-banks-to-store-cryptocurrencies/

Governments are not willing to accept crypto in its unregulated form, they will regulate it in order to use them in there regime. A regulated currency wont be a cryptocurrency.

The interest of governments and the features crypto currency holders are different and they both cannot be merged.

If the crypto is regulated and controlled, then it will no longer remain decentralized and hence, the whole concept of have a cryptocurrency in the first place will be useless as then we are back to centralized banking system.

If the government allows the crypto currencies, then they will have no control over it and this is what governments cannot afford.

[Beparanf]

banks will try find some ways that they'd still be used by people despite the fact that the wallet itself can function like a bank already. so what does the bank do again this time, they will still ask money for storing your coins to them?

although there will be users who will be embracing banks to also accept cryptocurrency deposits, it will really be unlikely for the people to use banks especially the ones who knows why satoshi created BTC.

Almost all banks have their mobile banking as well investment accounts that offers higher interest or trading account. It's unlikely that they will accept crypto but transfers in depositing seems fine now than before. It can depend on what country we live in.

[slaman29]

Actually, this is exactly what I thought when I read the news. Remember, first the parliament gave a statement that said bitcoin and crypto wasn't even real money. Then less than a month later we get this news that they passed the bill.

Remember they still don't say bitcoin is a good thing. But they know it's here to stay and if they don't do anything about it, they're doomed. So this is a late step but one that will save their ass.

[alyssa85]

Bitcoin is just another currency. So in the sense that banks make profits from handling currency, they can and should be able to make a profit out of handling bitcoin.

The reason people initially thought bitcoin would make banks obsolete was because you could have your wallet on your computer, which meant you didn't need to store it in the bank. But the blockchain has become so huge that most people arn't able to have their wallets on their computers, they hold them online in services like Coinbase. And this is where the banks can step in and offer wallet services - for a fee.

[Eternad]

Actually, this is exactly what I thought when I read the news. Remember, first the parliament gave a statement that said bitcoin and crypto wasn't even real money. Then less than a month later we get this news that they passed the bill.

Remember they still don't say bitcoin is a good thing. But they know it's here to stay and if they don't do anything about it, they're doomed. So this is a late step but one that will save their ass.

It will depend on our preferences on doing transactions, in my country even banks questions withdrawal of huge amount from crypto, they were questionable whenever you said it came from bitcoin. But now they partnered with some companies accepting crypto withdrawal and deposits. It will just depend on how they will form agreements on fess and transactions. I rarely use banks now.

[CarnagexD]

They could not totally prohibit Bitcoin because total ban is almost impossible. Acquiring Bitcoin and other cryptocurrencies is quite easy through unregulated exchanges. And if ban is implemented, demand for it might rise which would further increase Bitcoin's price.

Why would they do a total? Government are just playing it safe for their citizen and that's their job to keep. Since bitcoin is known and used by many, its volatility keeps soaring high on which risk is at large.
China for example, Chinese government is determining the factors to let people stay away with crypto especially bitcoin. Even bitcoin mining in China is at risk.

I don't see it as saving grace too for them. It might aid them for awhile but personally, I think people would just trust exchanges more than banks that would monitor their purchases. Even worse, they might advertise cryptocurrencies aggressively to innocent ones without them knowing of its volatile nature.

Trust exhanges that is prone to online hacking? Have you computed the total amount of stolen funds to cryptocurrency exchange this year? They have lost huge amount of funds this year even Binance has a history of stolen funds. Banks on the other side has a physical security and online security. With a massive information found in the internet today people won't be that fool investing on what they didn't know.

[lobat999]

Bitcoin began as the enemy of the banks, a new tool to bring traditional finance to a halt. However, as the cryptocurrency permeated the mainstream, it has become clear that the path for Bitcoin adoption is through financial regulation. But, does that mean that this decentralized digital asset can become the savior of the banks?

I don't think Bitcoin adoption can save ailing banks because we have to understand that whatever happened to these banks like having financial problems was the result of poor decision making, mismanagement, internal fraud,  etc., which clearly shows that crypto adoption alone won't solve these issues in the banking industry. Imho.

[aardvark15]

If banks want to stay in business and meet the demands of customers, they will need to adapt to the cryptocurrency economy. I think we will begin to see this happen more and new banks will be established as old banks go out of business.

[BrewMaster]

it is like saying "is the steam engine a saving grace for horses and carts?" just like the way engine made horses obsolete, bitcoin (the decentralized money) is what could make banks obsolete. because when people use decentralized money, they no longer need that middle man aka banks anymore and they can do everything themselves in a much cheaper way and free of their corruption!

[hatshepsut93]

A bill in Germany, having successfully passed through the Bundestag, the German federal parliament, is suggesting that traditional banks should buy, hold, sell and trade cryptocurrency. This could be a big step in helping struggling banks resurrect themselves.[/i]

Yeah, buying a volatile asset is sure a good way to save banks on the brink of insolvency! /s

First, the bill hasn't passed yet, so it's too early to celebrate. Next, most banks don't need to be saved and they can't be saved by Bitcoin. The goal of this bill is to just give banks access to another type of assets, maybe some banks will offer crypto custody services, or trading, or want to simply invest in it - there's many possibilities, and it's their choice what to do. Most banks will probably ignore it initially.

Don't create hype, it's never good to have unrealistic expectations.

[Pearls Before Swine]

A bill in Germany, having successfully passed through the Bundestag, the German federal parliament, is suggesting that traditional banks should buy, hold, sell and trade cryptocurrency.

That's all well and good, but what happens if those cryptocurrencies drop 50%, 80%, or 90% or even more while the gov't is holding them?  We all know that's a very real possibility, because those kinds of dramatic price movements have been common even with bitcoin.  I don't think it's a great idea for taxpayers to be funding speculation in crypto.

Banks might be ailing, but they'll survive.  The banking system has survived many shocks to it in the past, and some of them have been brutal.  I would question whether crypto will make it rather than if the banks will.  There is much less history in the former and less stability as well.

Yeah, buying a volatile asset is sure a good way to save banks on the brink of insolvency! /s

Well put and that's kind of what I was trying to say.  They might as well take taxpayer money and go to the casino with it and see how that works out for them.

[ntsdm1]

Blockchain technology will be the saving grace for struggling Banks.  The Banks quickly realized that Bitcoin was a disruptive force, so they

adapted to the threat by developing their own centralized Blockchain based technologies. The R3 Blockchain consortium are working on a enterprise

blockchain technology solution. They are building  distributed applications on top of Corda (known as CorDapps) for usage across industries such as

financial services, insurance, healthcare, trade finance, and digital assets. Source : https://en.m.wikipedia.org/wiki/R3_(company)  You will soon see

a host of Banking services using these technologies.  

And most likely the banks will succeed in this regard.After all, they actually have more opportunities.And let's just say, experts from the field of crypto-currencies may well become employees in the Bank.For me, it is absurd even to link cryptocurrency and banks, but you need to learn to look reality in the eye.Regulation of cryptocurrencies has already begun and governments, along with banks, will soon take control.

[TRONTON]

Banks have monetary policies that are supported by many things including bonds and taxes that can be more tightly regulated, they still have reserves to struggle in improving conditions, especially national banks that are supported by the government directly.

If they accept bitcoin without a strong design and are not fully stable, it will only be a time bomb and will be more difficult through the recovery process, and the biggest panic martyr will occur in their customers.

[RareFortune]

Crypto banks are on the rise, slowly but surely. Now that people are slowly transitioning to put their money in Bitcoin and other cryptocurrencies than in banks, it is clear that this is the future and no one can stop it. If these banks are still against it, they would be left behind.

The growing number of Bitcoin users day by day makes the bank think twice and to take action. They are doing their own research now on how will they benefit from adding Bitcoin in their current system and sooner or later they will realize that Bitcoin is not against them and just here to lend them a hand for the betterment of the financial industry.

[MFahad]

Bitcoin is just another currency. So in the sense that banks make profits from handling currency, they can and should be able to make a profit out of handling bitcoin.

The reason people initially thought bitcoin would make banks obsolete was because you could have your wallet on your computer, which meant you didn't need to store it in the bank. But the blockchain has become so huge that most people arn't able to have their wallets on their computers, they hold them online in services like Coinbase. And this is where the banks can step in and offer wallet services - for a fee.

Why would people pay a fee for a service which coinbase offer for free ? Also we do not need to store the whole blockchain database on our computers. We can store the bitcoins in desktop wallets like Electrum Bitcoin Wallet. It is way better and cheaper to store bitcoins in desktop / hardware wallets then to store them in online wallets or banks in future.