Can blockchain replace the traditional banking system?

[teosanru]

The emergence of blockchain technology has changed the development of global digital payment system business. With the impact of new cryptocurrency projects on banks and other financial institutions, many companies are forced to start making changes to their systems.
In the traditional financial system, the regulator will monitor your operations in order to maintain the integrity of the system, and the process will incur large costs and may be full of fraud. But the blockchain system gains integrity by incentivizing the best interests of the system and allowing anyone to verify it.
Blockchain and cryptocurrency are integrated into all walks of life to solve traditional solutions with safer and more efficient technologies. Although it is well known that it cannot replace cash, it may have the opportunity to replace or cooperate with traditional banking systems. Blockchain as an important innovation field of financial technology, can it replace the traditional banking system in the future?

https://www.ibtimes.com/can-these-blockchain-solutions-replace-traditional-banking-system-3259844

Actually, blockchain solutions have already started to replace traditional banking systems especially related to cheque clearance and transaction settlement between banks. I heard on one such example in Europe a couple of years back and now in India too banks are starting to use it as a system. Here is a source of the article : https://thepaypers.com/e-invoicing-supply-chain-finance/15-indian-banks-get-together-to-form-blockchain-trade-finance-consortium--1249797#:~:text=15%20Indian%20banks%20get%20together%20to%20form%20blockchain%20trade%20finance%20consortium,-Thursday%2017%20June&text=Th%20e%20banks%20involved%20include,reduce%20the%20volume%20of%20paperwork.

This helps them in decreasing the transaction costs relating to the inter-bank settlement. Moreover, when it comes to banks and their settlements, everyone likes an environment where there is no regulator in between and no one has supreme authority, even the central bank only has access limited to the reporting requirements imposed by them.

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[Dragonfund]

There is something you need to know my friend.
Traditional financial institutions are the most corrupt set of organizations to ever exist and do you want to know why, tell them to employ blockchain for transparency, they will ignore and wouldn't want anything that will be public, they want to do everything at their way.
Banks would actually do and perform better if and if they accept blockchain and it fundamentals but I still be believe government would be limited on how they explore most of this thing as they dislike things they can't control.

[leetcoiner]

I don't think so, at least not in the near future. Too much is tied to banks, such as loans. Will people be able to take out loans in cryptocurrency?
Will it be safe, because cryptocurrency is extremely volatile and in case of growth, you will have to pay much more than you took.

[just_Alice]

Replace? Maybe, but unlikely. Cooperate? Hardly possible. Banks make profit majorly by creating the circulation of funds, giving loans under a certain %, and making other deals which are impossible without tracking (and conrtolling) the flow of money, otherwise the bank would be putting itself under a great risk.

Now, the idea of cryptocurrency is quite the opposite - no one will know your ID if you don't link your address to it and no one can have access to your funds. So how can these two systems cooperate?

[cabron]

It's true that it cannot replace cash but it's not the goal of Bitcoin or cryptocurrencies. Traditional banking I think will still be here but they may actually apply the technology like how they are interested in Defi today. The senate is already talking about these disruptive technologies in the financial system, they may not really be open to this technology but more and more people are going into crypto for the lack of opportunity. The existing system today are now seen to be not democratic.

[adzino]

No it can't and it won't. Blockchain is a technology. A technology cannot replace a system. All it can do is integrate with the system to make it better. So no blockchain won't replaced the traditional banking system, but the tech might be used in the banking system. If you are talking about decentralized crypto currencies being able to replace the banking system, then I doubt that's going to happen  too. Might be after decades by a centralized currency.

[Clavulanic]

I don't think so, at least not in the near future. Too much is tied to banks, such as loans. Will people be able to take out loans in cryptocurrency?
Will it be safe, because cryptocurrency is extremely volatile and in case of growth, you will have to pay much more than you took.

Banks wouldn't allow cryptocurrency to take over on them, because fiat economy has the stable currency movements. Though we see some good points on crypto, but we have to consider the volatility of its market which I think business owners didn't want their money to risk on this idea. Blockchain will only be useful as an asset not really be associated with traditional system of spending like on fiat.

[Rahman11]

I think replacing for traditional banking systems to blockchain technology mainly depend on government mind, because government thinking behind of traditional banking systems blockchain technology is a threat cause it’s invisibility from any system. so if every government accept blockchain technology then it’s will be replace traditional banking systems.

[jinneas]

Blockchain technology is being used for certain applications by various countries in different ways. Basically, expecting blockchain to replace the traditional banking system is silly. If it was actually possible, don't you think it would have happened already?

Blockchain technology has changed the fixed development model of traditional industries and brought people a lot of benefits. As people strengthen their consensus, more people use cryptocurrency. Blockchain may be the future trend of the banking system and financial industry.

• It provides greater transparency and credibility for any content in the ledger, free from government control and interference.
• It can conduct transactions without restrictions and the cost of international transactions is low.

[AicecreaME]

While blockchain has been gradually known and used in most areas of systems and databases, I can't say it would totally replace the traditional banking system. A blockchain is a form of technology that is recognized as a secured system, impossible to hack and change that easily. Its development is something that the cryptocurrency world is thankful for because most cryptocurrencies work such as bitcoin because of blockchain technology. However, despite its advantage such as being a lot more secured compared to the traditional system centralized organizations are built upon, it is not enough to totally replace the usual banking system.

Centralize organizations such as banks have been existing for a very long time already. It won't just vanish because of the emergence of new technologies because surely, they will do all the things possible to keep up with the current trend. In addition, it's really impossible to totally remove the fiat system. It will exist as long as there is a government. The cryptocurrencies will just coexist with fiat and the same way blockchain technology will coexist with the traditional banking system. Blockchain and crypto will be the next best alternative if people will opt to switch modes of transaction and store of value.

[el kaka22]

I cannot speak on behalf of crypto taking over the banking and fiat worlds however I can say that banks definitely can use blockchain for their data systems. I mean think about it, what is that banks do the most? They keep track of your money, well everyone's money, who sent who how much, who has how much, basically it is all about money and instead of just servers if they ended up basically doing a blockchain, then they could definitely make this a lot easier for themselves.

Most major banks spend billions on their servers globally, because they are not just in one place, look at HSBC they are basically in every nation give or take, they spend billions on servers because of this. What they can do however is create a blockchain, put everything there, allow people to "mine" hsbc token by helping them keep the system going, and then pay those people fiat, a stable coin maybe, and that way they will make it more secure. However letting the whole world see their blockchain is a bit of a problem obviously, so that is why they need to figure the privacy issue first.

[Ozero]

I don't think so, at least not in the near future. Too much is tied to banks, such as loans. Will people be able to take out loans in cryptocurrency?
Will it be safe, because cryptocurrency is extremely volatile and in case of growth, you will have to pay much more than you took.

Banks wouldn't allow cryptocurrency to take over on them, because fiat economy has the stable currency movements. Though we see some good points on crypto, but we have to consider the volatility of its market which I think business owners didn't want their money to risk on this idea. Blockchain will only be useful as an asset not really be associated with traditional system of spending like on fiat.

For me, it is already strange that someone, it seems, seriously wants to speculate about this. How can cryptocurrency replace the banking system? Only those who know practically nothing about the banking system and about the structure and functioning of states can raise such a question. Banks are part of the government system and perform many very specific functions that cryptocurrency simply cannot do. The banking system can only be destroyed simultaneously with the destruction of states. And no one has dealt with states yet.
Blockchain is already part of the banking system, but it is only one of the technologies used by banks.

[hugeblack]

Blockchain can change the way data is managed by banks, but it will be decentralized, less expensive and faster than the current model, such as the Ripple currency.
But there is a big difference between the blockchain, digital currencies, and banking systems. The difference between them makes the comparison between them wrong and similar to comparing the C language, Windows, with HP sales.

[conected]

I don't think so, at least not in the near future. Too much is tied to banks, such as loans. Will people be able to take out loans in cryptocurrency?
Will it be safe, because cryptocurrency is extremely volatile and in case of growth, you will have to pay much more than you took.

- There are also some crypto loan services in the moment, the principle may be rudimentary and relatively risky and not as optimal as the rule of a traditional bank, but this is also considered a breakthrough for people to have loans on the blockchain platform and help blockchain have opportunity to replace traditional banking. Perfecting and honing these rudimentary principles to the best, blockchain will be partially used in the future but it will be parallel, rather than a stand-alone alternative.

[Findingnemo]

The emergence of blockchain technology has changed the development of global digital payment system business. With the impact of new cryptocurrency projects on banks and other financial institutions, many companies are forced to start making changes to their systems.
In the traditional financial system, the regulator will monitor your operations in order to maintain the integrity of the system, and the process will incur large costs and may be full of fraud. But the blockchain system gains integrity by incentivizing the best interests of the system and allowing anyone to verify it.
Blockchain and cryptocurrency are integrated into all walks of life to solve traditional solutions with safer and more efficient technologies. Although it is well known that it cannot replace cash, it may have the opportunity to replace or cooperate with traditional banking systems. Blockchain as an important innovation field of financial technology, can it replace the traditional banking system in the future?

https://www.ibtimes.com/can-these-blockchain-solutions-replace-traditional-banking-system-3259844

Banks are not imposing any changes into their financial system since all they are trying is to suppress the new blockchain digital payments with the tag of criminal money. Some governments even banned cryptocurrency without strong reason or simply because it affects their cashflow system.

While cryptocurrency is completely decentralized means no one can stop you from using it but you need mass people to realize that.

[ChiBitCTy]

I think it is far too early to say that "Although it is well known that it cannot replace cash".  I am not saying this can happen anytime real soon, it's absolutely possible that this could happen down the road.  I think blockchain has the potential to change a lot of different ways companies keep track of information or transact data and we are already seeing banking systems making these type of implementations.

[goaldigger]

I dont expect blockchain to replace traditional banking system, central bank can will always be centralized and will always want to be in charge of their financial system. I expect the traditional banking to merge with blockchain wherebye enabling the use of stable coin alone, not the volatile coin but they can be store as digital asset for the country for the future.

Central bank won’t allow this thing because banks is an established business for a decades now but I believe those banks can adopt blockchain technology to help improve their system and I know some banks already do this one so there’s no need for a blockchain to replace the traditional banking system. Fiat money will still be here despite of growing cryptocurrency, we can’t just live without it.

[Rengga Jati]

It can be adopted and used, but not really for replacing for this time. But not know the future, maybe after the mass adoption and everything is ready already.
Not only on banking systems but also in several other systems in various companies or institutions.
However, maybe the adoption period will be compensated there is a government or control holder in the company. Because not everyone wants to change quickly. So it might take a longer time for adoption times like this. Especially if this happens in some countries that still have a lot of traditional payment methods.

-snip-

Btw, Blockchain is a technology, not only about crypto. They can use blockchain technology for their system and that doesn't mean that they must create cryptocurrency also.  But I do agree that it may not replace the traditional bank system for this time (not know about the future)

[CaVO32]

It can be adopted and used, but not really for replacing for this time. But not know the future, maybe after the mass adoption and everything is ready already.
Not only on banking systems but also in several other systems in various companies or institutions.
However, maybe the adoption period will be compensated there is a government or control holder in the company. Because not everyone wants to change quickly. So it might take a longer time for adoption times like this. Especially if this happens in some countries that still have a lot of traditional payment methods.

-snip-

Btw, Blockchain is a technology, not only about crypto. They can use blockchain technology for their system and that doesn't mean that they must create cryptocurrency also.  But I do agree that it may not replace the traditional bank system for this time (not know about the future)

They may adopt the technology like creating their own CBDC, but they won't be replacing their traditional banking anytime soon. This will really take time and consumers are not ready for this. Just be happy that today they are more open in this technology and trying to integrate it in their system via CBDC. But not all governments are into this development. Implementation of blockchain tech is not that easy when it comes to government because they have a lot of considerations, they need to think of their citizens that would possibly use it.

[milewilda]

I dont expect blockchain to replace traditional banking system, central bank will always be centralized and will always want to be in charge of their financial system. I expect the traditional banking to merge with blockchain wherebye enabling the use of stable coin alone, not the volatile coin but they can be stored as digital asset for the country for the future.

Same views and beliefs because as long do government exist then its just normal that they wont really be letting everything would be on transparent and being mixed with that decentralized stuff.
They would always like that they should be always in control and its true that there might be some add ups but i dont really believe that it would replace that traditional banking system.
Innovation is good but placing something which had been used through ages and as long there are people who are on the top of the chain then they are the ones who would
making out those rules and never intent to adopt something which is totally opposing on what they do have in control.