Are banks needed for crypto?

[hannahB4]

You Subject is entirely different from your write-up. But I will say you don't need a bank for crypto

[timerland]

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.

Absolutely not. Banks are middlemen that DeFi is trying to replace.

Sure, it may seem impossible right now to work apply DeFi to the real life, but truth is that increasingly a lot of the utility of banks are going away.

You can already borrow using collateral, enter into swaps, etc. with absolutely no middlemen on DeFi platforms. All these things you can already do, just think about what's possible in 10 years when DeFi actually matures.

[markdario112616]

Not literally, crypto can stand without having an actual bank. Though we need it somehow in dealing using P2P trades usually a personal Bank account is needed. Yet, there are still P2P traders allowing transactions using another virtual wallet. So yeah, Crypto have its own workaround that Banks have. So nah, even without banks crypto will still move.

[Ngemmeng]

it looks like a token sale on a project can be interpreted as a loan in fiat currency. Here the investor acts like a lender and the development team will use the funds to develop the project. it doesn't stop there, later after the project develops investors will benefit from the token sale. maybe the investor's profit can be interpreted as interest on fiat currency loans.

[Kimonoe]

Not literally, crypto can stand without having an actual bank. Though we need it somehow in dealing using P2P trades usually a personal Bank account is needed. Yet, there are still P2P traders allowing transactions using another virtual wallet. So yeah, Crypto have its own workaround that Banks have. So nah, even without banks crypto will still move.

indeed without crypto banks can move as they are today, but we do not know what kind of crypto policy will be enforced in the future. we know the government plays an important role, where we cannot avoid the regulations that have been set. actually in crypto everyone has their own bank and must be responsible for the security of their wallet

[Ozero]

I don't think so, there are payment apps that accepts crypto and converts it into fiat so I don't think that we're going to need bank in our crypto, not to mention that their obsolete, we don't need a middle man in crypto so no worthy reason why we need them in the cryptospace.

Yes we don't need anymore banks because crypto isn't made to be dependent on banks. More and more countries and legal tenders are now accepting transactions in the form of crypto and someday bitcoin and other leading cryptocurrencies will be legalized in the whole world and that's the specific goal of bitcoin.
In addition, banks nowadays aren't trustworthy anymore because anytime they can declare bankruptcy which we don't want to happen.

We talked about banks for cryptocurrency earlier, before the advent of decentralized finance (DeFi). This is a relatively new direction in cryptocurrency, which can largely replace the functions of cryptocurrency banks with its smart contacts. Of course, we are not talking about banks in general, but about cryptocurrency banks. Almost all civil transactions that banks could make in cryptocurrency can be carried out using smart contracts. Crypto banks can of course exist as some kind of alternative to DeFi.

[nakamura12]

I don't think so, there are payment apps that accepts crypto and converts it into fiat so I don't think that we're going to need bank in our crypto, not to mention that their obsolete, we don't need a middle man in crypto so no worthy reason why we need them in the cryptospace.

I haven't heard or know other platforms that accept crypto and can be converted to fiat and able to cash out to the bank. In my country there is an app like that where I can receive crypto and can convert crypro to fiat. I don't think banks have a lot of role in this one but what I think is it could be useful if the bank supported the app where we can deposit fiat and buy crypto lile binance for example.

[Findingnemo]

Loan mechanism in crypto space is completely secured but not reliable because the only way to get loan in the crypto is by providing valid collateral which should be equal to the value of loan your are taking but we also can ask that why someone have to take loan when they can simply sell those cryptocurrency and make money.

[SquallLeonhart]

Banks are middlemen that DeFi is trying to replace.

Sure, it may seem impossible right now to work apply DeFi to the real life, but truth is that increasingly a lot of the utility of banks are going away.

You can already borrow using collateral, enter into swaps, etc. with absolutely no middlemen on DeFi platforms. All these things you can already do, just think about what's possible in 10 years when DeFi actually matures.

It really doesn't look that impossible neither. There are few things that a bank can do that DeFican''t do just yet, like yeah we have lending there but not the way banks do have, banks give free money basically without expecting much, which is why they have such high default rates compared to past and yet they get bailed out so they do not care who they are giving loans since they will get it back one way or another. However, defi does cover so much of the regular banks situation.

A wallet, a good portfolio, some investments into yield farming and staking, you are literally set for life in your investment and your storage of value as well. There is really nothing else you may need. Give me 200k dollars right now and I could live with that forever ever needing to make any other money by working. That is what stock market and banks supposed to be, but defi took it all by itself and made it a lot better.

[perfect999]

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?

It’s possible to take loans in cryptocurrency, and this is something that has been working even before the idea of DeFi came out. There has been a few legit cryptocurrency websites that  allows you to take loans and it works the same way you’d take loans in the banks; you give something as a collateral, something that’s equal to the loan amount you’re about to take and later you can repay the money and then have back what you have given to them as a collateral. That’s the same way it works in the cryptocurrency ecosystem, if you want to take a loan you will have to give a collateral, though time around you’re using your cryptocurrency assets as your collateral.

[Wong Gendheng]

Not needed, if we go into crypto then there is no need for third party services such as banks, with crypto all control is in hand, the presence of banks will only create dependence and they can use our money for business without notifying us and when we withdraw it takes a process Long story short, crypto doesn't need banks.

[wiss19]

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?

Implementing the lending feature in crypto is a not big deal which again does not guarantee that it will make banking system obsolete. Crypto will exist and fiats and traditional banking will exist to serve their own purposes until there would be some demand for these. I mean when no body prefer to use banks and fiats then it will be abandoned one day for sure.

Crypto can boom with our without banks; When time moves-on people will choose the better one and this way we could expect banks may not be needed for crypto users in near future.

[witcher_sense]

Not needed, if we go into crypto then there is no need for third party services such as banks, with crypto all control is in hand, the presence of banks will only create dependence and they can use our money for business without notifying us and when we withdraw it takes a process Long story short, crypto doesn't need banks.

There is nothing wrong with commercial banks would be taking clients' money into custody. Those who don't want to be responsible for their money, those who are not very keen to learn the basics of how to manage and store the keys to their bitcoin wallet would happily engage banks' services. In this case, banks are going to be no different from mere warehouses that take a small fee for giving you a space to put in your stuff. There will be free and fair competition between different banks-warehouses, which means it will be in their best interests not to play with their clients' coins.

[LUCKMCFLY]

In some very famous banks, they have put cryptocurrencies, the most common case that I always like to put it as an example is JP Morgan, because his clients were demanding that they could operate with crypto and he had no choice but to put it, Not without first mentioning that I didn't recommend it because BTC wasn't trustworthy. Likewise, in Spain, BBVA is managing to operate with BTC and cryptocurrencies, and not only for Spain but for all BBVA subsidiaries worldwide, to be able to enter with this service.

[Fatunad]

In some very famous banks, they have put cryptocurrencies, the most common case that I always like to put it as an example is JP Morgan, because his clients were demanding that they could operate with crypto and he had no choice but to put it, Not without first mentioning that I didn't recommend it because BTC wasn't trustworthy. Likewise, in Spain, BBVA is managing to operate with BTC and cryptocurrencies, and not only for Spain but for all BBVA subsidiaries worldwide, to be able to enter with this service.

We've seen several banks that had integrated or adopted crypto but doesnt mean that it will really be letting users to be that anonymous or cant be known which simply means that you do still in line with rules and regulations by the institution itself which means it did really remove out the essence of decentralization thats why i do really cross out that kind of consideration because crypto shouldnt really be regulated
nor be ran off by centralized platforms/institutions or something like this.We dont need banks on the essence of anonymity and decentralization but still people do see the different way around
which it isnt surprising at all.

[lumierre]

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.

Actually, there are plenty of defi-projects that can give you loans with small APRs. One that I can think about off the top of my head is Poloniex, so you can check this platform if you are interested. One people deposit crypto and get interests, others can take out loans there, so everything works in the same mechanism as in ordinary banks.

[Hypnosis00]

In some very famous banks, they have put cryptocurrencies, the most common case that I always like to put it as an example is JP Morgan, because his clients were demanding that they could operate with crypto and he had no choice but to put it, Not without first mentioning that I didn't recommend it because BTC wasn't trustworthy. Likewise, in Spain, BBVA is managing to operate with BTC and cryptocurrencies, and not only for Spain but for all BBVA subsidiaries worldwide, to be able to enter with this service.

We've seen several banks that had integrated or adopted crypto but doesnt mean that it will really be letting users to be that anonymous or cant be known which simply means that you do still in line with rules and regulations by the institution itself which means it did really remove out the essence of decentralization thats why i do really cross out that kind of consideration because crypto shouldnt really be regulated
nor be ran off by centralized platforms/institutions or something like this.We dont need banks on the essence of anonymity and decentralization but still people do see the different way around
which it isnt surprising at all.

Banks is not the right place to visit if you keep your identity anonymous as they will surely ask for the validity of your ownership and comply with KYC. Nevertheless, it gives us security assurance of our money which most crypto wallets couldn't have (aside from hardware wallets). If we worried so much about this thing, I guess banks are very important.

The integration of banks and crypto will help for a huge adoption. With their partnership, it becomes easier for the people to make a buy and use banks as their third party if possible and a secure transaction, unlike using non-reputed exchanger. I hope there is such realization and banks will become open to these changes.

[jrrsparkles]

There is no actual alternative to loans we are taking in banks when it comes to crypto and its one of the disadvantage in the decentralized economy but its good for the long term since we wre not going to be trapped in the credit and repayment cycle forever if we know how to manage the funds we have and spend it effectively.

[STT]

The two are not in line with each other, crypto and bank are decentralized and banks rely on national entities with enforced costs to money via fixed interest rates.    To say crypto requires banks would be to have the whole system require politics for funding and survival.   If you want to interface crypto to FIAT trading then its going to involve banks within that exchange but the larger hope is crypto doesnt lean on dollars for an idea of value.

[Kadal Ijo]

If we can do all bank functions ourselves then we no longer need banks, the presence of banks in crypto is an obstacle which I'm sure one day will apply strict rules for withdrawals, moreover we can send crypto with large or small amounts in just a few seconds, banks don't needed for crypto.