The thing that sets cryptocurrency apart from banking is its anonymity and privacy. The fact that there is no need for a central bank or a governing body to control what goes on in the market is what sets it apart from banking in the first place.
Recently, major international banks have entered the cryptocurrency sphere. For example, Barclays have held discussions regarding potentially trading cryptocurrencies. This is a positive sign for the whole market as it shows that major banks are eager to acknowledge the potential of this from a business and a technological perspective. The most obvious benefit of this occurring would be that it would be a direct way for people to exchange their Fiat for crypto, which would significantly reduce the time it takes to exchange fiat for cryptocurrencies at this moment of time and thus, boosting the supply in the market.
Furthermore, aside from opening the doors to a wave of new customers, it also puts cryptocurrency at a state of priority for international governments. The debates surrounding cryptocurrency are already significant enough to attract mass media attention, and with major banks adopting cryptocurrency, there is no way for the regulators to ignore the inevitability that cryptocurrencies are here to stay.
At the same time, many argue that it challenges the core principles of digital currencies. Banks are regulated and are under the control of a central bank in most countries. This already goes directly against what cryptocurrency is there to do.
Additionally, the prospect of banks establishing their own coins with blockchain technology looms large. Banks have the power and potential to use the technology at their disposal to challenge the current top 10 or even 100 cryptocurrencies. Though this isn’t likely to happen any time soon, it is a possibility, especially when given the fact that multiple other banks such as HSBC, Morgan Stanley and Swiss bank are all expanding with the aid of blockchain technology.
Ultimately, as the market continues to recover and shown signs of the highs of 2017, there is no doubt that banks will increasingly get involved. They are banks, they see a strong potential for profit, and they act on it. Whilst they will challenge the core principles of the idea behind cryptocurrency, the market will sustain a positive impact in terms of value. Cryptocurrencies remain at the early stages of adoption and if major banks begin to normalise the use of cryptocurrency, then we could easily see the market volume exceed the highs that were seen at the end of 2017. Therefore, bank adoption is good for cryptocurrency.
However, we must wait and see just how many banks are willing to use cryptocurrency for trading and technological benefit in the future, and how much this impacts the way we think of banking.
International Political Economy student & Cryptocurrency enthusiast.
Founder of OurEconomy.