Why don't banks work with cryptocurrency?

[zanezane]

The government do not allow banks to fully engage in such activities. Banks is centralized and is controled by the government.  But digital currency  is decentralized,these two are contradictory sides.

But that shouldn't stop them from working together, decentralized only means that there's no authority at the top that dictates what they should. I mean some banks are offering cryptocurrencies in their services and they are doing just fine so it's not like it's not a doable thing.

[Ngemmeng]

Banks are centralized, and it is an area of ​​government supervision. The cryptocurrency is decentralized, free from anyone's monitoring and restriction, and cannot provide guarantees like the National Bank in case of transaction errors.
Due to its volatility and unstable prices, cryptocurrencies are prone to economic losses for investors and are risky. The legal currency will not appreciate or depreciate sharply and is relatively stable.

Accepting crypto is of course very risky because of price fluctuations which are like a roller coaster, besides that banks must of course comply with state regulations to maintain fiat so that it is impossible to make crypto as a bank service product.

crypto doesn't have to be about bitcoin or ethereum, they can create their own crypto that is private and has a stable value. it is unlikely that they will adopt a digital currency that has a very high fluctuating value because it can cause a sudden decline and development of assets.

[oHnK]

Erm... Sorry, but I guess I would have to contradict here. Do you really think banks are not interesting in dealing with assets that are easy to bubble? Seriously, they are very interested in dealing with such assets. The reason is quite simple: if they facilitate credit to get the housing/real estate market to bubble, and then see the whole market crash and real estate owners can't supply sufficient collateral anymore because of the decreased real estate value, banks are in a perfect position to now get the collateral at lower prices back than they initially were willing to finance it for.

I don't think it will be as simple as what you say because even though the bank can take collateral for the credit given, the bank will still have problems turning the assets they take.  Like the case of a bank in my country, default on the credit given has a bad effect on the bank.  Bank health is very important for a country because 1 bank in trouble in a country will usually attract other banks.  The financial sector is the most sensitive to the country's economic stability.

[tyz]

it is clear that banks are basically under the control of the government.

Well, they are not under control of the government, but under control of the law. Sure the law is made by the government. But if you see it this way, you can also say, we all are not free because we are under control of the government, too. There are some regulation laws and back must be lawful according to the regulation laws. In crypto just as in other asset forms in which they invest.

[Ryker1]

it is clear that banks are basically under the control of the government.

Well, they are not under control of the government, but under control of the law. Sure the law is made by the government. But if you see it this way, you can also say, we all are not free because we are under control of the government, too. There are some regulation laws and back must be lawful according to the regulation laws. In crypto just as in other asset forms in which they invest.

Well, that means that banks and government always regulate any financial institutions --the real problem here is they cannot earn money if they will accept bitcoin and it could destroy the financial system that was the government live for. The tax that makes the country fully develop by constructing building infrastructure, roads, and others that come from people's money is the only source where the country needs as recurring expenses can be like salaries paid to government servants. If bitcoin will replace fiat? Then bitcoin is not a taxable asset, where our government will collect the fund so that our economy will survive. Let us accept the fact that bitcoin is only good for alternative currency, not our main fiat or even a safe haven of storing the value.

[jinneas]

Banks are subject to government-controlled central banks, which are subject to government supervision and control. Bank transactions must involve their use of interest or commissions, which can benefit from them, and the use of cryptocurrency will affect their own interests.
Cryptocurrency is decentralized, it has anonymity, such as the use of cryptocurrency for illegal transactions, it will be difficult to trace encrypted transactions. And the price of cryptocurrency is volatile and it is difficult for banks to obtain a fixed profit from it.

[glendall]

the crypto system is very different from the bank system, where the crypto system can stop the bank's income as pasif income , and not to mention the government policies that control the bank itself, moreover banks can't track crypto transactions, there will definitely be a lot of abuse from crypto itself  such as money laundering, and illegal trading with cryptocurrencies.

[Maxre]

Another reason is as a result of government policy and control. We all know the banks are subject to a central bank controlled by the government, so it is not going to be easy to accept to work with something that has not been approved by the government.

Well, I agree with this opinion. Bitcoin, which has a decentralized nature, is an independent financial system that is managed by individuals without having to be regulated and controlled by the government. It is unlikely that banks will work for cryptocurrency. After all, cryptocurrencies and their wallets are everyone's bank. Crypto wallet owners are free to use their money. Unlike traditional banks.

[Vaskiy]

it is clear that banks are basically under the control of the government.

Well, they are not under control of the government, but under control of the law. Sure the law is made by the government. But if you see it this way, you can also say, we all are not free because we are under control of the government, too. There are some regulation laws and back must be lawful according to the regulation laws. In crypto just as in other asset forms in which they invest.

Banks are functional under the law created by government. Maybe in future this can happen, as banks are experiencing massive loss due to the increasing usage of cryptocurrencies.

Already few countries have created their own cryptocurrency, and those might work along with the banking infrastructure of the country. Atleast now we've got more countries providing regulations to be followed for cryptocurrency usage. This itself a good move, because earlier more banks stopped services for cryptocurrency related activities.

[South Park]

it is clear that banks are basically under the control of the government.
it's true it would be great if banks could work with crypto but politics isn't that easy my friend. when an agency is shaded by the government, they will automatically use the rules in accordance with what the government proposes regardless of whether it's good or not because of course the government also doesn't want to lose from this.
and if banks cooperate with crypto, automatic dominance and government monopoly will be a little more difficult because their control will not be strong anymore because crypto is very difficult to control

In my opinion you have it backwards, it is the banks that are in control of the governments and they are pressuring the politicians to not pass laws and regulations that are favorable to cryptocurrencies, and it is not difficult to understand why this is the case, cryptocurrencies are direct competitors against banks and banks for the most part are a monopoly and they do not like the idea of sharing their power so they're going to do everything that they can to avoid this scenario and will only cooperate once it is clear that there is no way they are going to beat this market.

[roosbit]

Banks are regulated financial institutions and will follow whatever the government says through a central bank as its in charge of legislation of laws of the state.

If a bank fails to follow what it's expected of it, it has a lot to lose, which is why if the government says cryptocurrencies are banned in a country it wouldn't want to risk losing its license and existence for not abiding to these laws. I also think the bank doesn't like crypto because it could lose its business to it.

[Shenzou]

it is clear that banks are basically under the control of the government.
it's true it would be great if banks could work with crypto but politics isn't that easy my friend. when an agency is shaded by the government, they will automatically use the rules in accordance with what the government proposes regardless of whether it's good or not because of course the government also doesn't want to lose from this.
and if banks cooperate with crypto, automatic dominance and government monopoly will be a little more difficult because their control will not be strong anymore because crypto is very difficult to control

In my opinion you have it backwards, it is the banks that are in control of the governments and they are pressuring the politicians to not pass laws and regulations that are favorable to cryptocurrencies, and it is not difficult to understand why this is the case, cryptocurrencies are direct competitors against banks and banks for the most part are a monopoly and they do not like the idea of sharing their power so they're going to do everything that they can to avoid this scenario and will only cooperate once it is clear that there is no way they are going to beat this market.

I agree with you on the point that banks are afraid of cryptocurrencies replacing them, but it don't think that they are the ones that are directly influencing that decision, if you think about it the central banks controls all the other banks which is controlled by the government, because the value of a fiat currency is based on the economy of the country which is controlled by the different sides of the governmental institutions, which means that governments are the ones that control the currency, and by using cryptocurrency they won't be able to control it.

[Duzter]

Banks are regulated financial institutions and will follow whatever the government says through a central bank as its in charge of legislation of laws of the state.

If a bank fails to follow what it's expected of it, it has a lot to lose, which is why if the government says cryptocurrencies are banned in a country it wouldn't want to risk losing its license and existence for not abiding to these laws.

Those are some reasons, same time these banks don't have a positive thought about cryptocurrencies. Some has begun to work with cryptocurrency, whereas majority of the banking services find it a threat for them. When something breaks the intermediary need, automatically it gains importance. This will make them have cryptocurrency out of their control unit. This will change as countries have begun to legalize cryptocurrency usage.

[Bravehash]

They can't, crypto isn't a stable asset it's highly volatility and far different from money, it's going to be hard to see crypto and medium of exchange really because the volatile part doesn't guarantee anything

[B-Bit]

Because banks rely on the state, the state controls people through legal currency, and most people will also believe in the state.
All the banks where you spend with fiat currency have records, he will know what all your funds have done, and he will collect taxes based on your expenses.
If you use cryptocurrency, no one knows what you consume and what you buy, it's free.

[shogun47]

Erm... Sorry, but I guess I would have to contradict here. Do you really think banks are not interesting in dealing with assets that are easy to bubble? Seriously, they are very interested in dealing with such assets. The reason is quite simple: if they facilitate credit to get the housing/real estate market to bubble, and then see the whole market crash and real estate owners can't supply sufficient collateral anymore because of the decreased real estate value, banks are in a perfect position to now get the collateral at lower prices back than they initially were willing to finance it for.

I don't think it will be as simple as what you say because even though the bank can take collateral for the credit given, the bank will still have problems turning the assets they take.  Like the case of a bank in my country, default on the credit given has a bad effect on the bank.  Bank health is very important for a country because 1 bank in trouble in a country will usually attract other banks.  The financial sector is the most sensitive to the country's economic stability.

I don't know which country you are from, but wealthy banks from the United States no very well that the economy works in cycles. From time to time we might see gigantic failures like Lehman in 2008, but usually banks are just healthy enough to play their game into the next cycle. A lot of people could buy houses because there were also sellers at the peak. Why was there sufficient supply to meet that high demand? Because the rich and clever knew that the market is peaking and they expected to find themselves in a situation later on to buy back cheaper than what they sold for.

[South Park]

it is clear that banks are basically under the control of the government.
it's true it would be great if banks could work with crypto but politics isn't that easy my friend. when an agency is shaded by the government, they will automatically use the rules in accordance with what the government proposes regardless of whether it's good or not because of course the government also doesn't want to lose from this.
and if banks cooperate with crypto, automatic dominance and government monopoly will be a little more difficult because their control will not be strong anymore because crypto is very difficult to control

In my opinion you have it backwards, it is the banks that are in control of the governments and they are pressuring the politicians to not pass laws and regulations that are favorable to cryptocurrencies, and it is not difficult to understand why this is the case, cryptocurrencies are direct competitors against banks and banks for the most part are a monopoly and they do not like the idea of sharing their power so they're going to do everything that they can to avoid this scenario and will only cooperate once it is clear that there is no way they are going to beat this market.

I agree with you on the point that banks are afraid of cryptocurrencies replacing them, but it don't think that they are the ones that are directly influencing that decision, if you think about it the central banks controls all the other banks which is controlled by the government, because the value of a fiat currency is based on the economy of the country which is controlled by the different sides of the governmental institutions, which means that governments are the ones that control the currency, and by using cryptocurrency they won't be able to control it.

In many countries the central bank is not controlled or owned by the government, and in the case of the most important currency around the world this is the case so I still think that banks are the most directly interested in not allowing bitcoin to flourish, but at this point it is too late since there is nothing they can do to stop bitcoin, however I wonder that happens next as I think banks will most likely try to do to bitcoin the same they did to gold and in that instance there is not much we can do to stop banks from buying bitcoin and then store it, decreasing the supply of bitcoin available to the public forever.

[jakdanyel]

It's a good explanation. But actually, banks have started to work with cryptocurrencies these days. For example, some banks in Texas, USA have started to give place to cryptocurrencies in their system also. And I've heard about some European banks also that they started to do so a long time ago. I think banks are doing this because they don't want to miss the opportunity to attract crypto users.

[Dragonfund]

It's a good explanation. But actually, banks have started to work with cryptocurrencies these days. For example, some banks in Texas, USA have started to give place to cryptocurrencies in their system also. And I've heard about some European banks also that they started to do so a long time ago. I think banks are doing this because they don't want to miss the opportunity to attract crypto users.

Minor banks you called banks? Those are state banks and aren't that pretty much as people actually wanted them, I also think that those banks are actually getting something from customers either high fee charges or some commission, banks are very wise, they hardly give except for lucky family bonanza.
Banks are becoming difficult for everyone as they are also reported disallowing deposits and withdrawal, they are never friendly.

[Rasa nanas]

It's a good explanation. But actually, banks have started to work with cryptocurrencies these days. For example, some banks in Texas, USA have started to give place to cryptocurrencies in their system also. And I've heard about some European banks also that they started to do so a long time ago. I think banks are doing this because they don't want to miss the opportunity to attract crypto users.

it seems that now many banks have started adopting cryptocurrencies. recently i heard that the ukraine state will issue their own crypto and will legalize cryptocurrencies soon. I think after this more countries will issue their own crypto and start legalizing cryptocurrencies.