How Cryptocurrency Can Revolutionize The Banking Industry
Cryptocurrency and blockchain technology has revolutionized the concept of digital currency or which we can also call virtual currency. Blockchain is the underlying technology of crypto which can also be used in other various under industries such as the hotel industry, hospitals, tourism, music industry, gaming industry, finance industry, law enforcement and so forth. Similarly, every cryptocurrency has its unique vision, functions and applications even though they belong to the very same cryptocurrency world. Many industries and large organizations are adopting and accepting cryptocurrency such as merchants, Master Card, Microsoft, Wikimedia, Overstock, AT&T and so forth.
One such industry is the banking and finance industry, accepting and adaptation of cryptocurrency and blockchain technology can bring a major change to the banking and finance world. Since cryptocurrency is being recognized across the world, it has been in the news that related clients and institutional investors have been showing interest in using the innovation in the industry. Instead many venture capital funds, crypto enthusiasts, investors, fintech have even stated cryptocurrency as ‘the future of money’. However, it is also important to consider the risks with cryptocurrency since the market is volatile, scalable, vulnerable to cyber attacks, money laundering and terrorism, but the right mix functions of cryptocurrency and regulatory framework can help reduce and ease the threat.
In this blog, we are going to discuss How Cryptocurrency Can Revolutionize The Banking Industry:
Cryptocurrency has the potentiality, prospect and opportunities to change the conventional banking services that would offer transparency, efficiency and reduce the interference from the intermediaries. Cryptocurrency can provide payments processing, international cash transactions with minimal fees, escrow services, its benefits from the smart contract, loans and so forth.
Many industries have adopted the technology, such as -
JPMorgan in 2019 adopted blockchain technology and introduced its own cryptocurrency called - JPM Coin - the coin can be utilized to fund transfers and faster transaction settlements.
The European Central Bank has set up in offering a digital euro, wherein Yves Mersch, the Executive Board Member, said, “not because we want to keep up with fashionable trends,” “but because we have to be ready.”
One such project that has been delayed but plans to launch is by the Libra Association. Its Libra system works towards a mechanism for the payment settlement globally that would lessen the volatility and help make the transaction costs almost zero.
Also Read, 13 Major Companies That Accept Cryptocurrency
However, there is the other side of the coin, whereas many banking leaders are unsure and uncertain about the aspects of cryptocurrency and its technology. Since many have already adopted cryptocurrency, it creates a pathway for others to understand the subjects and their use-cases, functions and regulatory framework. The industry is competitive, thus, it is only important and beneficial to educate and strategize to stay up to the game and lead the game.
The Factors In Adopting Cryptocurrency
In any business, it is important to stay with the trends and in the emerging market structure in the field so as to create potentiality on a larger scale.
The cryptocurrencies that are top in the list of highly speculative investment - should be the main bucket goal such as Bitcoin, Ethereum, Cardano, Bitcoin Cash and many such more.
Staying up to date about the new vehicles such as ICOs - Initial Coin Offerings has opportunities with the banks.
Investment with cryptocurrency can be used as a diversified portfolio.
Factors such as private and institutional investors, broker-dealers, trading centres, new currencies initiation, storage technology, transaction and analytics infrastructures are the potential structural aspects inorder to be a part of something bigger.
Industries are seizing the opportunities with cryptocurrencies and it can only get difficult for the banking industry to participate in the emerging competitive environment if not taken the measurement early. Banks can offer cryptocurrency and blockchain-related services such as help startup ventures with the capital markets for ICOs, cryptocurrency-enabled digital payments, currency-trading services, cryptocurrency transactions, diversified portfolio services, cryptocurrency investments, tokenization investments, real-estate investments, utilization of the technology for the operations, smart contract offerings, transaction-monitoring services, integration of cryptocurrency with payment platform or related-services, and banks can even offer to help its clients if they need any crypto-oriented services so as to wider its working scale.
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