Will crypto banks replace traditional banks

[Susano]

Within a few years, a younger generation of financial services customers is going to be able to walk into a bank and gain access to credit products, savings accounts, and investments that can host both cryptocurrency and fiat purchases. The inroads that will permit all of this to happen are already smashing the ground.
...
Clients will soon clarify a “full assistance” bank as one that proposes economic services in both crypto and fiat. The period to start cultivating the essential devices for the crypto banking trade is right now. Banks need to start adapting or get left behind. Make no mistake about it."

Article: Crypto banks are going to swallow fiat banks in 3 years — or even less

What do you think about this topic, whether cryptocurrency banks can face off and soon replace traditional banks in the fate? I think this is tricky to occur because the current number of crypto banks is very tolerable described to the number of traditional banks. Even in the most optimistic scenario possible, if banks around the globe implement an efficient method of transaction (maybe Ripple), they will only accept stable coin rotation or CBDC to be able to Compliance with the monetary regulations of governments.

[BlackHatCoiner]

Banks need to start adapting or get left behind.

Banks can't compete small companies taking off and fintech, because banks are giant, immovable, slow institutions. Most are tied with bureaucrats, and can't just risk alike.

Article: Crypto banks are going to swallow fiat banks in 3 years — or even less

"Crypto banks", in the manner I understand it, is regular banks with cryptocurrencies along with fiat. So it's expected that people will use them as intermediaries. Yeah, that sort of nullifies the whole concept of cryptocurrency.

[bittraffic]

It defeats the purpose of decentralization when you store your crypto assets in a bank.  We are reminded all the time of the "not your keys, not your coins"  so if you still keep your coins in a bank, that's a classic example of you not learning.

Bitcoin was supposed to be stored safely where you own it. Be your own bank.

[BenCodie]

It defeats the purpose of decentralization when you store your crypto assets in a bank.  We are reminded all the time of the "not your keys, not your coins"  so if you still keep your coins in a bank, that's a classic example of you not learning.

Bitcoin was supposed to be stored safely where you own it. Be your own bank.

Banks that utilize a business plan that successfully incorporates smart-contracts for a decentralized experience are definitely possible and are probably the way of a viable crypto banking future. We are on the way there already with DeFi but definitely no where near the finish line. I think you are thinking crypto banking in the traditional sense. I think that that crypto will have to innovate banking in many ways to succeed, and will.

[uneng]

It should be already a reality, the issue is that such institutions offering crypto and fiat mixed services lack credibility. The company Celsius was supposed to work as a bank, but it scammed customers, so people just don't trust it anymore.

There is still Nexo, Crypto.com and few other alternatives, however investors don't see it in the same manner anymore. People want guarantees they will deposit their money on those companies and will be able to retrieve it anytime. Unfortunatelly those guarantees don't exist.

On the other hand, the government of my country guarantees banks have to retrieve funds back to customers up to 48,000$ per ID. So, as long as you have that sum in your account, you will be safe. However, these traditional institutions aren't going to adopt decentralized cryptocurrencies, just CBDC.

[hatshepsut93]

How is something that doesn't exist today is going to replace the backbone of global economy in just 3 years? If you listen to bitcoiners, Bitcoin should have replaced fiat many years ago. Yet we all still go to supermarkets and pay with fiat for groceries.

Regular people have no incentive to switch to crypto banks and crypto in general. They don't care about fiat's inflation that much. And they don't care about privacy. And control over own funds. And let's not forget that even if crypto banks started getting traction, governments and traditional banks would either resist this trend or hijack it.

[The Cryptovator]

Cryptocurrency continues to play a role in the global economy, but this does not imply that Bitcoin or cryptocurrency will replace traditional fiat banks. The government begins mobile banking and digital banking to change how people manage their assets without going to the bank. Although they do not use cryptocurrency, they do provide a digital experience. Fiat currency will exist and cannot be replaced by cryptocurrency.

[Die_empty]

As the Bitcoin industry keep growing and expanding, I am sure it would give birth to many financial services that might be similar to conventional banking. But the beauty of these services would only be if it supports the decentralization goal of Bitcoin.

Bitcoin is currently popular among youths but a larger number of the global population are not yet aware of this unique cryptocurrency. Most of them are only conversant with fiat and are very comfortable using it. There are other issues such as lack of infrastructure, illiteracy and unfavorable government policies that would continue to hinder the progress of Bitcoin in some countries. The bottom line is that fiat and cryptocurrency would keep existing side by side until majority of the world's population understands the importance of Bitcoin. 

[Z-tight]

Crypto banks aren't entirely a new kind of banks, they are traditional banks that accept crypto in the same way they accept fiat and traditional assets, so you can't talk of them replacing traditional banks, i believe the correct thing should be that most traditional banks in the future may start accepting crypto in addition to fiat and traditional assets.

Crypto exchanges are already a problem to crypto people as they have failed to learn how to hold their crypto in their self custody wallets, i don't feel crypto banks is a good thing for the network, it takes everything back to a centralized model. Crypto exchanges are enough for the network, people should use them to trade their crypto, and they should use self custody wallets to hold their funds, engaging more services in the network would only confuse people the more and make them make mistakes as to how crypto should be used.

[Bitstar_coin]

Well it is possible that crypto banks could replace traditional banks in the future, but for now, there is uncertainty. The use and acceptance of cryptocurrencies is still relatively new and the government have not yet made clear any regulatory policies concerning crypto adoption, perhaps one of the reasons why the adoption process is slow.

Traditional banks on the other hand,  have a significant advantage in terms of infrastructure and long-term relationship built for years.  
It is possible that crypto banks could serve as complementary to traditional banks, offering unique services such as low transaction fees, cross-border transactions and a higher level of security and privacy to its users.
And this is more likely to happen since it will be extremely difficult for traditional banks to be replaced.

[Doan9269]

We can talk about the bitcoin market confidently without compromise but not  with the entire crypto market since bitcoin is believed to be the only most recognized currency that is being acceptable as a media for exchange and asset, now that we are already in thw digital era with bitcoin adoption, this have been changing for good as the financial economy is going as expected through bitcoin adoption with maximum profitability of investment, currently now bitcoin weekly confirmed transactions has surpassed that if fiat without a course or barrier.

[Synchronice]

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Article: Crypto banks are going to swallow fiat banks in 3 years — or even less

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I think that you forgot to include the link and here it is: https://cointelegraph.com/news/crypto-banks-are-going-to-swallow-fiat-banks-in-3-years-or-even-less

I think that crypto bank is a clickbait in the article. The main idea of the article is that young generation will probably not be interested to deal with the banks that don't offer crypto services too. It is logical because young generation is more techy and more friendly towards it compared to the older generation that most likely prefers to stick with the old methods. I agree with this statement but there is no way that Kraken and similar "banks" will ever be able to swallow traditional giant fiat banks. When the time comes and the major banks sense that there is a time to implement crypto, they'll just do it and Voilà, everything will be alright.

[freedomgo]

How is something that doesn't exist today is going to replace the backbone of global economy in just 3 years? If you listen to bitcoiners, Bitcoin should have replaced fiat many years ago. Yet we all still go to supermarkets and pay with fiat for groceries.

Regular people have no incentive to switch to crypto banks and crypto in general. They don't care about fiat's inflation that much. And they don't care about privacy. And control over own funds. And let's not forget that even if crypto banks started getting traction, governments and traditional banks would either resist this trend or hijack it.

Crypto may be globally adopted in the future, but that won’t mean that it will replace fiat and traditional banks. Crypto will only serve as an option to fiat, fiat will always be the main currency. So it’s hard to expect that crypto banks will replace traditional banks because majority will still use traditional banks over crypto banks.

[pixie85]

Regular people have no incentive to switch to crypto banks and crypto in general. They don't care about fiat's inflation that much. And they don't care about privacy. And control over own funds. And let's not forget that even if crypto banks started getting traction, governments and traditional banks would either resist this trend or hijack it.

That's true, as long as those regular people are doing fine, living in their bubble.

Canadians who went on to protest against lockdowns and covid restrictions also thought about themselves as regular people and then they started to get scammed from all sides. Even gofundme stole their money which shows that centralized companies are corrupt and the government can do what it wants with them.

I agree that people don't need crypto banks. They need crypto-friendly banks. bitcoin isn't here to replace fiat but to replace custodial services and introduce some transparency.

[romero121]

Cryptocurrency usage around the world keeps increasing with time. This is happening our of the people's interest upon technology and getting connected to it. Banks were the backing system of a country's economy. Such an out right replacing of traditional banks won't happen. Existence of cryptocurrency banks too is a limited trail in specific locations as it requires time as well as make people understand well about it.

[Zaguru12]

Well it is possible that crypto banks could replace traditional banks in the future, but for now, there is uncertainty. The use and acceptance of cryptocurrencies is still relatively new and the government have not yet made clear any regulatory policies concerning crypto adoption, perhaps one of the reasons why the adoption process is slow.

I doubt maybe there will even be any crypto banks, possibly we could see traditional banks incorporating cryptocurrency transactions in their system, that is what might have even incited the CDBC idea. This now could lead us to the question wouldn’t this actually defies the sole purpose of cryptocurrency or rather bitcoin which is decentralization. The centralized exchanges today look more or less like our assumed crypto banks and I doubt investors will fall for it and store their funds there.

[ Crypto may be globally adopted in the future, but that won’t mean that it will replace fiat and traditional banks. Crypto will only serve as an option to fiat, fiat will always be the main currency. So it’s hard to expect that crypto banks will replace traditional banks because majority will still use traditional banks over crypto banks.

This is one area even the government is not well informed about, they feel bitcoin or crypto is here to replace the entire Fiat system, why wouldn’t they when they have their way with irregularities in traditional banks. Crypto is or should be use as an alternative to fiat

[BitDane]

I can say crypto banks can be an alternative but I do not think that it will replace the traditional banks.  One of the major reason is the government and the financial institution.  They will never let crypto banks to dominate the market, these two entities will always try thier best to put everything under their control.  With that in the financial system, financial institution will make sure that their traditional banks will not cease to exist.

[buwaytress]

Crypto banks? What would that even mean?

The best we see today is crypto companies acquiring controlling stakes in banks -- and these existing licences are on products they're not going to let go of anytime soon for want of keeping customers.

When banks accept other assets, they don't become different types of banks. They are still banks, whether it was gold, dollars, shares, bonds, stocks, all kinds of investments and assets. That didn't make them gold banks, bond banks, stock banks.

Get used to the idea that traditional banking doesn't evolve just because it accepts crypto deposits. Let's wait for when they let customers actually withdraw coins first before we discuss crypto banking.

[Viscore]

Cryptocurrency continues to play a role in the global economy, but this does not imply that Bitcoin or cryptocurrency will replace traditional fiat banks. The government begins mobile banking and digital banking to change how people manage their assets without going to the bank. Although they do not use cryptocurrency, they do provide a digital experience. Fiat currency will exist and cannot be replaced by cryptocurrency.

Fiat will stay for good even if crypto usage will become rampant. And besides, crypto is designed to be an alternative payment over fiat so it will never replace the position of fiat, instead they should work hand in hand to create prosperity in the global economy. That way, people will also have more freedom to choose which mode of payment that they feel most convenient for them.

[Ryker1]

This was discussed here repeatedly or perhaps in a different way but it has the same question, ^{[can crypto replace fiat?]}
But in the first place, what are crypto banks? I don't see there is a potential bank in crypto but if you mean your wallet, that should not be on centralized wallets, like the bank --it should be on the non-custodial wallet. This will not happen and the creator of bitcoin this did not have a purpose, the main purpose is to alternative the fiat transaction anonymously and never rely on a third party. Bitcoin is a financial freedom while fiat it si not, but bitcoin is not going to be the main currency world wide, it should have a different value.