Why don't banks work with cryptocurrency?

[Spack17]

Most of banks are still not working with Bitcoin or any other cryptocurrency. But I believe that it will change in the future. Banks will even line up to do so. Because they won't be able to do without digital currencies. Every day, more people join the digital money world. And at some point, we will stop using paper money also. Then if banks still resist, then they will be gone one by one.

[romero121]

Very few countries have banks that operate with bitcoin and cryptocurrency. Banks always want its userbase to function under their control. This becomes a hard thing to be done when banks starts to operate with cryptocurrency. Apart from this banks think of hacks, because a single security breach into the banks vault will cause a big loss to the banking system. Though the technology is highly secure there is chance of security breach. Some are interested on the blockchain technology for its good, but hesitant to use cryptocurrencies into banking system.

[capcaypro]

maybe they can cooperate with crypto but they must be prepared to lose some of their profits even though the profits of others will increase.
because basically we all already know that crypto has a decentralized nature. from this alone the bank can no longer interfere and it will be very difficult to track the system that is in the bank and crypto is different.
on the other hand, there may be several banks that have started to open up and collaborate with crypto. but it's just an alternative payment method and an option other than that the rest is to increase the centralized currency

[Fortify]

There is a logical explanation for this.
First, the volatility inherent in digital assets. The fact is that the main goal of every bank is to make a profit. The slightest fluctuation in the cryptocurrency market increases the risk of reducing all projected profits to zero. Today, cryptocurrency is showing a certain stability, but even despite these indicators, most financial institutions still prefer to provide traditional banking services for corporate clients, whose activities they understand.

Decentralized Cryptocurrency is not controlled or limited by anyone alone, there is no single administrator and regulator. Not a single financial, tax, government organization can influence the actions of participants in the payment system.
Ethereum is a multifunctional virtual platform on which blockchain-based applications (online services) are created. Applications work as "smart contracts (smart contracts)" that exclude third parties (intermediaries) in the transaction process. On their basis, it is possible to create a platform that will stimulate banks to lend against the security of cryptocurrency without fear of losses, and this, in turn, will interest the financial sector to place its assets in cryptocurrency?

In solving this problem, I took as an example the existing US financial system.
Assuming that Ethereum is the Dollar, and the smart contract is the Office of the Comptroller of the Currency of the United States (OCC), and ETH-WORLD tokens are the Securities of the US Treasury, we get a financial model of a new decentralized economic system based on cryptocurrency. I implemented all this in my project, in contrast to the existing Fiat, it completely lacks an external emission regulator and is managed by the smart contract program.

It looks like *investment* banks are increasingly getting involved with Bitcoin and cryptocurrency instruments, probably pushed along by requests from their clientele. Laws had to be made up especially for these financial contracts and regulators are usually quite far behind when it comes to the latest trends. However traditional banks are quite rightly wary of cryptocurrency because essentially if it is adopted on a mass scale it would make a large part of their functionality obsolete. That being said, their could be specialist banks (maybe that is what certain exchanges are aiming to become) which offer these abilities, but every customer would be expected to go through a process that eliminates their anonymity if they needed to follow anti-money laundering specifications.

[livingfree]

Most of banks are still not working with Bitcoin or any other cryptocurrency. But I believe that it will change in the future. Banks will even line up to do so. Because they won't be able to do without digital currencies. Every day, more people join the digital money world. And at some point, we will stop using paper money also. Then if banks still resist, then they will be gone one by one.

If they start to collaborate with bitcoin to their services, that will be the usual thing that banks do and that's with the loans.

There's trust and confidence with the banks if they're going to do that but how they will determine the value of it and quantity that they'll put in loans.

It's a complicated thing to them at this stage so this will just move on them slowly.

[paxmao]

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

Inestability is not a real problem, banks have worked with mortgage backed securities in 2008 and everyone knew that these were not really stable not worth much for that matter, yet still they sold them around until the last fool standing saw them drop to zero. Anyway, crypto can be used as any currency with fluctuating value - that is all of them - even banks will use turkish liras and the like when their clients demand so, so crypto is not different nor should be.

[shield132]

I wouldn't say that they don't work with cryptocurrencies, no, some banks are really interested in it but they don't act directly. More likely I would say that every bank is interested in it but the way they express their interest is very different, some of them want to adapt it, some of them want to conquer it and some of them want to get rid of it.

As I said, some banks are really interested in it and isntead of directly accepting the crypto, they create 3rd party companies, partner with them and offer bitcoin exchange that way. For example, imagine I have an account in HSBC bank and HSBC owns a company similar of Webmoney. Webmoney on another hand is a whole different experience that offers me to store some $$, pay bills, deposit on gambling accounts, etc but... It also gives me possibility to receive the crypto and convert in into USD or other currency. HSBC can't do this but their partner Webmoney (just saying) can do it legally because similar financial providers are rarely regulated. I deposit crypto on webmoney, convert in into USD and because of HSBC/Webmoney partnership I spend my $ on HSBC bank account and then do whatever I wish.

[Shasha80]

Very few countries have banks that operate with bitcoin and cryptocurrency. Banks always want its userbase to function under their control. This becomes a hard thing to be done when banks starts to operate with cryptocurrency. Apart from this banks think of hacks, because a single security breach into the banks vault will cause a big loss to the banking system. Though the technology is highly secure there is chance of security breach. Some are interested on the blockchain technology for its good, but hesitant to use cryptocurrencies into banking system.

Banks are indeed very difficult to work with cryptocurrencies, because both have different systems. Moreover, banks are very easily controlled
by the government, while we knows crypto is decentralization, which cannot be controlled by the government. With some differences that exist
in the banking system and crypto, finally crypto is only possible as an alternative payment. Even in some countries crypto is still considered
a threat to the banking system, so only allow crypto as a digital asset.

[famososMuertos]

There is a medium acceptance  with certain banks that are already "playing" Bitcoin and even creating possible commercial alliances with small FINTECH, in Mexico BBVA has managed to finance entrepreneurs  creating commercial channels.

There is no direct commercial relationship but it is being created indirect commercial associations that allow you to start having experience with Bitcoin.

Other examples, Europe specifically BBVA.Mc from Spain:

Spain’s BBVA (BBVA.MC) said on Friday said it was launching a bitcoin trading service for private banking clients in Switzerland interested in digital asset investment.

^{Source: https://www.reuters.com/business/spains-bbva-opens-bitcoin-trading-service-clients-switzerland-2021-06-18/
June 18, 2021. Last Updated 2 months ago.}

[CaVO32]

Very few countries have banks that operate with bitcoin and cryptocurrency. Banks always want its userbase to function under their control. This becomes a hard thing to be done when banks starts to operate with cryptocurrency. Apart from this banks think of hacks, because a single security breach into the banks vault will cause a big loss to the banking system. Though the technology is highly secure there is chance of security breach. Some are interested on the blockchain technology for its good, but hesitant to use cryptocurrencies into banking system.

Banks are indeed very difficult to work with cryptocurrencies, because both have different systems. Moreover, banks are very easily controlled
by the government, while we knows crypto is decentralization, which cannot be controlled by the government. With some differences that exist
in the banking system and crypto, finally crypto is only possible as an alternative payment. Even in some countries crypto is still considered
a threat to the banking system, so only allow crypto as a digital asset.

What crypto differentiates from banking system, is that they can't fully control crypto transactions. Whereas, as we all know, banking system is centralized where the government has the full control on the system. They can only accept it as alternative payment for the moment but totally adopting crypto is still far from their horizon. Just be glad that the adoption of crypto right now is booming owed to this pandemic. A lot of merchants are looking for alternative payment options. And crypto is a very good candidate on this.

[Charot12345]

It's true that Decentralization and volatility are the key factors that the banks don't work with cryptocurrency right now. The banks, as well as the government have no authority or responsibility when it comes to cryptocurrency. And also because of anonymity that make it impossible or difficult to find out who owns or use crypto for any transactions and that kind of information was very important to banks. It is more advantageous for banks if the people continuous to use fiat system and they are already nervous with the existence of crypto.

But at thought of banks working with crypto.. I think it is possible. Crypto adaptation is growing and still happening. Everyday new people are engaging themselves on it that threatens banks. So I think banks are probably planning or thinking on how they can also adopt crypto, thinking on how they still make it profitable to them. Though it was hard for them but they need to come up with a solution so that they can still go with the flow and not left behind.

[Baihaki Khaizan]

I think banking will embrace and embrace digital currency. it's only a matter of time, indeed for banks the presence of cryptocurrencies is a scourge for them. but I'm sure after all the systems are studied and mastered by them, the crypto currency will become a new business field for the banking world.

[nicecrypto]

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

In all, I believe that is the major issue cryptocurrencies have when it comes to seeing it as a means of exchange and on a positive note, why people are more into crypto. If there was no volatility in crypto, there wouldn't be the king of profits that investors get from it and wouldn't have been investing in it that much. So, what is a positive for crypto investors is what makes it difficult as a means for exchange hence, it is different from money.

[Shasha80]

Banks are indeed very difficult to work with cryptocurrencies, because both have different systems. Moreover, banks are very easily controlled
by the government, while we knows crypto is decentralization, which cannot be controlled by the government. With some differences that exist
in the banking system and crypto, finally crypto is only possible as an alternative payment. Even in some countries crypto is still considered
a threat to the banking system, so only allow crypto as a digital asset.

What crypto differentiates from banking system, is that they can't fully control crypto transactions. Whereas, as we all know, banking system is centralized where the government has the full control on the system. They can only accept it as alternative payment for the moment but totally adopting crypto is still far from their horizon. Just be glad that the adoption of crypto right now is booming owed to this pandemic. A lot of merchants are looking for alternative payment options. And crypto is a very good candidate on this.

Differences in the system and the political role of the government that hinders cryptocurrency from placing its position as a currency. for now it seems we can only make money from bitcoin, because the government in my country has no sign of using it even during this pandemic. I think crypto will be an alternative payment tool along with the proof in the eyes of the world

It is true that government regulations are one of the barriers to crypto as a currency, because not all countries accept Bitcoin. Some countries do
only allow Bitcoin as a digital asset, then it is very difficult for Bitcoin to be accepted in all countries of the world as an alternative payment.
But I believe in the end the government can realize the benefits of Bitcoin, it does take time for Bitcoin to be accepted by everyone. Meanwhile for
people who live in countries where the government has not given permission for Bitcoin as payment, should be grateful to still be able to use Bitcoin
to make money.

[livingfree]

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

In all, I believe that is the major issue cryptocurrencies have when it comes to seeing it as a means of exchange and on a positive note, why people are more into crypto. If there was no volatility in crypto, there wouldn't be the king of profits that investors get from it and wouldn't have been investing in it that much. So, what is a positive for crypto investors is what makes it difficult as a means for exchange hence, it is different from money.

Yes, it's one issue to the banks.

A highly volatile asset can't be accepted by them and most of the banks aren't really looking forward in adopting cryptocurrencies with their services.

But there might be some open-minded banking management that shall adopt this soon in the future. The crypto market is showing unstoppable potential and growth so they won't ignore it.

[bosede1]

My instinct is telling me that some of the banks may partially be working with cryptocurrency, they might not bring it to the table for everyone to see but some might be trading anonymously.

[Taskford]

My instinct is telling me that some of the banks may partially be working with cryptocurrency, they might not bring it to the table for everyone to see but some might be trading anonymously.

It's hard to confirm that statement since we don't know that there are are banks really do that but what we can see right now is they are not engaging with crypto stuff but hopefully this institution will work with cryptocurrency since if they do that for sure this one could boost their growth as many bitcoin users or whales really want to secure their money on legal institutions but maybe we could see this happen once government will successfully adopt bitcoin.

[EdwardB00]

My opinion is that banks do not want to use crypto because it is not safe, at no time does it know if you are going to be at the top or at a low that you will not be able to get out. So the banks can't afford it. They are safe institutions and if they lose money for some cryptocurrency then what will happen to them? They have to raise%, to ask for more from people or on a bad occasion - close.

[Republikcoin.com]

By adopting Blockchain technology in the banking system, the bank will not have more flexible control over its customers. This of course will limit the space for the banks to manage their customers' finances.
Besides we do not know clearly, what the money from customers is used for, the controllers of the customer's money also certainly have a threat to the assets that we keep in the bank.
We know that every bank takes advantage of non-transparent money services. In fact, many banking cases are actually very detrimental to the customer. This is because the customer's strength to fight is not strong and does not dare.

[gustavroy]

People do not know but actualy they are working with crypto specially with EFT's and since 2017 we all know central banks interest with blockchain even some central banks was working with ripple but idk what happened. So My opinion is since 2025 Those interests will be more solid.