Are banks needed for crypto?

[Hydrogen]

If you could design and build the perfect bank limited only by your knowledge and the depths of your imagination. What would it look like? How would it compare to current era banking institutions? Do people need better banks or would society be better served by banks offering fewer tools and options to clients: forcing the public to rely on them less?

Banks definitely enjoy some advantages at the moment over crypto. Brand name recognition. Endorsement by public and private sectors. Trust from the public as a reliable institution.

Some of the advantages crypto has over banks are: flexibility, decentralization, trust less design paradigm, far lower barrier to market entry, et cetera.

Its common for people to approach the topic as if banks and crypto were two predatory animals that will be thrown into a UFC cage to do battle so a victor can emerge.

I think all people care about is having the best tool for the job. Whichever demographic, whether its banks or crypto, who offers the better product that gives people access to better opportunities and options is what they are likely to pursue. The free market determines the value, and worth of things.

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[breathlessz]

Just started to learn about DeFi, and a question arose.

Fiats have a loan mechanism. Manufacturers use it to improve their production.

Is there something similar in crypto? How does it work then? And are such services in demand? Do manufacturers take loans in crypto?

Isn't that killing DeFi idea? Is there a future for loan mechanism in crypto?

Thanks everyone in advance for the answers.

It can be said that the concept of Defi is still very new and the government will definitely not let defi from their attention.  but defi will definitely shift the bank because the borrowing process is easy and simple, not like a bank that is very complicated.

I think we can only predict it, on the other hand the biggest power is in the hands of the government, while banks are under the control of the government, even though they have a better system, but I don't think it is easy to influence the government with all its advantages.

[Kittygalore]

No way that crypto needs banks, I've been using crypto for a long time and I don't use banks just to convert or buy some crypto. Banks are a different kind of entity, it may coexist but merging isn't the best for both especially for cryptocurrencies.

[so98nn]

The first thing you should pay attention to is the level of crypto price volatility. Not that stablecoins can be used to provide real-world loans, but whether a country can provide space to include crypto which until now is still in category 2, namely the investment group.
If we refer to the future, maybe it's not the time for us to say precisely. it is possible when the two institutions of decentralization and centralization can be combined in one financial system. Is that possible?

I think crypto loans are here since many years and there seems no issues with anyone: the lender and the borrower. Even the bitcointalk forum has it's own section for the same. Though volatility is a great issue in the crypto world then also the interest rates are decided as per the deal which sought at first and peeps keep paying accordingly. There are also projects for this purpose where escrows are set and loans are given away. Not sure where does the OP is stuck in terms of loan situation.
Banks are not needed at all. All you need is good escrow who can handle the both parties which I see as close to as bank itself. In fact involvement of third part add up more security too if it's valid source.

[Fortify]

Just started to learn about DeFi, and a question arose.

Fiats have a loan mechanism. Manufacturers use it to improve their production.

Is there something similar in crypto? How does it work then? And are such services in demand? Do manufacturers take loans in crypto?

Isn't that killing DeFi idea? Is there a future for loan mechanism in crypto?

Thanks everyone in advance for the answers.

I don't think it is yet a reality that you can live comfortably and without major disruption in your life if you only have access to cryptocurrency. Whether you want to grab some fast food or fill your car up with gas, most mainstream companies still only accept fiat currency. It will be that way for quite some time, although we are seeing a gradual shift with certain companies trying hard to accept crypto, it will be a major inconvenience for the average consumer. Loans only work when you have trust involved and one of the underlying principles of cryptocurrency is the anonymity it gives to you, so it feels like you have to either pick one (by providing your identity to loan companies) or provide enough collateral to make the loan risk-free which is self defeating in most circumstances.

[Smartvirus]

I was discussing with a colleague in the forum some time ago. I discovered that, for the few users that takes loan, some form of collateral was given often. Most times, it almost equals what your requesting just that, it might be usdt against bitcoin and I kept wondering, to what point is it!
How can I have usdt of almost equal value and instead of exciting it for the coin of interest and be about my business, I proceed to getting a loan. It doesn't makeups sense. What's the idea behind this sort this sort of behaviour because, I just don't get it at all.

[Lanatsa]

No way that crypto needs banks, I've been using crypto for a long time and I don't use banks just to convert or buy some crypto. Banks are a different kind of entity, it may coexist but merging isn't the best for both especially for cryptocurrencies.

Why people do really think off about merging or replacing fiat in the first place? Banks would remain as long fiat would be still there and its true that banks are regulated which means they do really need to

follow up on what government rules is.Crypto doesn't really need any banks because you could be your own bank on yourself and that's the beauty of it but we cant really deny that

we do still make out some active conversions which would be ending up on having fiat in the end of the day.

[jaberwock]

Just started to learn about DeFi, and a question arose.

Fiats have a loan mechanism. Manufacturers use it to improve their production.

Is there something similar in crypto? How does it work then? And are such services in demand? Do manufacturers take loans in crypto?

Isn't that killing DeFi idea? Is there a future for loan mechanism in crypto?

We can't say "needed" but do you really want to turn down such a powerful ally? I mean the only reason why I am in crypto is banks, I hate banks, I literally hate them, there are no organizations or business in the world that I hate more than I hate banks, I am using the word hate here.

However the moment I realized that banks could bribe politicians into getting crypto accepted and supported and loved by a government is the moment I realized that there is nothing wrong with accepting banks as allies. We can still use crypto without a bank if we want to, there is nobody forcing you to put your crypto in a bank or something, but if they are in our side, then it would be a lot more profitable for us for sure.

[BuNga_cute]

No way that crypto needs banks, I've been using crypto for a long time and I don't use banks just to convert or buy some crypto. Banks are a different kind of entity, it may coexist but merging isn't the best for both especially for cryptocurrencies.

Why people do really think off about merging or replacing fiat in the first place? Banks would remain as long fiat would be still there and its true that banks are regulated which means they do really need to

follow up on what government rules is.Crypto doesn't really need any banks because you could be your own bank on yourself and that's the beauty of it but we cant really deny that

we do still make out some active conversions which would be ending up on having fiat in the end of the day.

I find it hard to imagine a world without banks, because the government needs banks as a third party to control the people's finances. So no matter
how good crypto is, it will not replace fiat and if there is fiat, the presence of a bank is definitely needed. I've always thought it would be better for
crypto and fiat to co-exist, so they could complement each other. Indeed, crypto transactions do not require a bank, we can convert one coin into
another without a bank. But the problem is that not many merchants accept crypto payments, in fact there are still many countries that prohibit
crypto as payments. In the end we need a bank to convert crypto into fiat, so we can use it to buy what we want.

[SquallLeonhart]

Banks definitely enjoy some advantages at the moment over crypto. Brand name recognition. Endorsement by public and private sectors. Trust from the public as a reliable institution.

Some of the advantages crypto has over banks are: flexibility, decentralization, trust less design paradigm, far lower barrier to market entry, et cetera.

Its common for people to approach the topic as if banks and crypto were two predatory animals that will be thrown into a UFC cage to do battle so a victor can emerge.

I think all people care about is having the best tool for the job. Whichever demographic, whether its banks or crypto, who offers the better product that gives people access to better opportunities and options is what they are likely to pursue. The free market determines the value, and worth of things.

There wouldn't be anything specifically changing, just a bit more decentralized and more like a wallet. So, right now banks work to make a profit, and the idea is not really that different from mine, the only thing different would be people would use it simply just for the storage part of it, I do not want to carry out too much cash? I will put it in the bank. It works perfectly for that purpose and that has been enough forever.

I do not believe that it should be anything more than that ever, loans and debts and everything else seems to be the main reason for this problem. Sure if you have a house and you want to get a loan then you can take it and your house will be sold if you ever fail to pay your loan back. However if you have nothing and you are still expected to pay back then it is not going to be fine at all, I prefer not to go with that route. So just.. a wallet service called banks, that's it.

[Hippocrypto]

Just started to learn about DeFi, and a question arose.

Fiats have a loan mechanism. Manufacturers use it to improve their production.

Is there something similar in crypto? How does it work then? And are such services in demand? Do manufacturers take loans in crypto?

Isn't that killing DeFi idea? Is there a future for loan mechanism in crypto?

Thanks everyone in advance for the answers.

Depending on how the situation works out with loan, if every investments from bank would technically going to be successful I guess that's not a serious problem at all. Worst thing is that, taking loan risked so many things like monthly bills that we needed to tackle with. You just can't ignore payments while your crypto asset goes down in value, that's why you tend to lose your capital in many cases. So I don't really recommend bank as source of your crypto investment.

[verita1]

DeFi offers services of lending, borrowing, staking, farming several ways to make your money produce. So far I have participated in staking and farming services. With these two reward incentives I have earned and I really like it. I had the opportunity to invest with a minimal investment and win.
Only you should investigate and join just hodl is not enough we have the freedom to learn to manage our money.

[adzino]

We don't need  banks for crypto. Adding banks would just make the whole system centralized which is what bitcoin and most of the crypto currencies are completely against. Borrowing money or taking loans in crypto in a decentralized way might be very complicated. I don't think there are currently any projects that offer anything like this. There used to be (not sure if they still exists) centralized platform where users could take loans in crypto. You had to give something else (more in value to protect lenders from volatility) as collateral. A centralized way with a third-party ensuring everything is fair.

[zanezane]

No way that crypto needs banks, I've been using crypto for a long time and I don't use banks just to convert or buy some crypto. Banks are a different kind of entity, it may coexist but merging isn't the best for both especially for cryptocurrencies.

Totally agree, I only use online payment apps that can be connected to Binance to get my fiat that came from my converted crypto profits. Definitely bad for crypto to merge with banks since the people at the top of the bank is definitely going to do something so they can fully control crypto when they merge.

[romero121]

What is a Bank in common man's view ?

A place where one can make use when there is financial need. The service is provided through collateral and several other means, though the banking network is taking control of people's money there is some form of connection and trust.

Now when we talk of what's the need of Bank for cryptocurrency. In my country everyone is made to create a bank account. There are exceptions without banking account. When we think of taking the cryptocurrency among the entire population, banks can be used as a channel and it gives people more trust than reaching people through other means.

[enhu]

What is a Bank in common man's view ?

A place where one can make use when there is financial need. The service is provided through collateral and several other means, though the banking network is taking control of people's money there is some form of connection and trust.

Now when we talk of what's the need of Bank for cryptocurrency. In my country everyone is made to create a bank account. There are exceptions without banking account. When we think of taking the cryptocurrency among the entire population, banks can be used as a channel and it gives people more trust than reaching people through other means.

Its the other way round this time. Banks need crypto and blockchain to become useful for the people who engage in the blockchain.

Today I read some news from the cointelegraph about a bank in El Salvador working with the Bitcoin Defi platform Sovryn which is popular in the forum. Developers I think are happy to work with banks as well to spread the adoption.

[Gyfts]

I don't mind banks existing in a crypto environment. They'd just be what the modern day exchanges are with no fiscal control over the global markets. My biggest problem with central banks (among other issues) is they don't even try to be fiscally responsible. They'll purposefully manipulate the currency in order to push spending by creating a built in inflation mechanism.

Imagine if within the Bitcoin protocol there was a mechanism involved that diminished your balance of BTC by 2 percent every year. That's modern day inflation for you, where central banks target inflation at some arbitrary rate year over year to discourage folks from hoarding currency.

[hello_good_sir]

Absolutely not.

DeFi and other instruments have only pushed us closer to this eventuality.

Banks are exactly what crypto promises to replace. Stablecoins which require banking institutions to be effective are not the way forward.

[Mpamaegbu]

Just started to learn about DeFi, and a question arose.

Fiats have a loan mechanism. Manufacturers use it to improve their production.

Is there something similar in crypto? How does it work then? And are such services in demand? Do manufacturers take loans in crypto?

Isn't that killing DeFi idea? Is there a future for loan mechanism in crypto?

Thanks everyone in advance for the answers.

Before starting out, I will like to make my observation clear that your topic question is totally different from the content of your post. The mention of banks in the title that deviates from the context (not content here) doesn't distract the dual nature of your post anyway. Let me dwell on the title – "Are banks needed for crypto", however. To that I would say, yes the crypto industry needs banks to survive and make a headway. There's a reason Bitcoin started out with fiat pair. It amuses me when I hear people argue that banks should be jettisoned when it comes to cryptos. It will be an uphill task to achieve Bitcoin greatness without fiat and the banks, really.

[henmark]

We don't need  banks for crypto. Adding banks would just make the whole system centralized which is what bitcoin and most of the crypto currencies are completely against. Borrowing money or taking loans in crypto in a decentralized way might be very complicated. I don't think there are currently any projects that offer anything like this. There used to be (not sure if they still exists) centralized platform where users could take loans in crypto. You had to give something else (more in value to protect lenders from volatility) as collateral. A centralized way with a third-party ensuring everything is fair.

You are right we don't need banks as these could be to make all this centralized, and we are doing things against this all. Crypto is just being your own bank, it never said anything about concept of what banks are, you just become one yourself. In crypto, there is P2P trading which means, you and another person buy and sell crypto.

These days crypto is in beginning time, so we can see more new ways and platforms those happen to bank can serve better services to common peoples. Even it's going to take very long time because right now too many regulations coming for controlling crypto.