If cryptocurrencies triumph over fiat, where does this leave the banking industry? Is it the end? Or will banks simply adapt and utilise this new digital technology?
Imagine a world where you didn’t need to visit the bank within working hours to deposit cash, make a transfer or take out a loan.
The banking industry has been at the forefront of western civilisation for centuries, positioning itself as a beacon of the financial sector and as a safe means to store a person’s wealth.
However, in the wake of decentralised systems and cryptocurrencies, is there a possibility that banks will find themselves dormant?
The current state of cryptocurrency
Bitcoin was first introduced after the market crash of 2008. People were starting to lose trust and faith in the centralised currencies and central authorities.
In light of this, bitcoin was deemed as the solution to the problems created by using fiat currencies.
Although due to its constant fluctuation in value and well-publicised money laundering cases, it hasn’t triumphed over fiat currencies just set.
But what happens if or when it does?
In recent news, we’re seeing the birth of more secure platforms, developed to safeguard digital assets.
Pair this with the introduction of more regulatory frameworks in the European Union and there’s a high possibility that we’ll see a steadier market – which could change the consumers’ stance on cryptocurrency.
Begging the question; if the industry does become trusted and more popular, is there any need for banks?
In relatively simple terms, banks represent the centralised system, whereas cryptocurrencies are decentralised, meaning there’s no need for someone at a bank to help with the process. This could spell a problem for the banking industry.
But for the highly adaptable, it seems very unlikely that every bank will just roll over without a fight.
The chances are, those banks who slowly transform their centralised infrastructure into a decentralised one will be able to keep up with crypto trends and ensure their survival.
When will things change?
From the outset, it’s hard to see how every person in western civilisation is going to suddenly put all of their trust in a relatively new and unpredictable technology.
The concept of currency took years to develop and evolve, so why would the world just fall out of love with something they’re familiar with? We see it all the time, whether it’s the slow transition from DVDs to Blu-ray and 4K tech or an artist’s single gradually establishing itself as a sleeper hit in the charts. People take time to adapt.
There’s no doubt that cryptocurrency and blockchain technology is here to stay. In fact, it’s just too innovative to fade out into the background. However, making the banking industry redundant in its entirety isn’t very likely – even if fiat currencies render itself worthless.
A lot of experts believe as soon as more countries form a robust set of regulations, you could start to see more businesses and banks utilising the power of blockchain technology.
This could take months or years. Although one thing’s for sure, don’t be surprised to see banks making subtle changes in between then to ensure they aren’t left behind.
Need any advice on creating a sustainable crypto business? Then get in touch with our expert team here at Blockchain ConsultUs.