People have been witness to inflation for too long, getting to see and experience how fiat currencies lose their value over bad measures and policies. While many citizens save the money they spent years working to get, their purchasing power drops over the course of time. Cryptocurrencies appeared as an escape from this problem.
Most people wonder why banks are worried about crypto, as it stands as a promising alternative to the problems of traditional finance. This article will break it down.
Why are banks worried about crypto?
Banks are centralized entities where people put their savings in, setting conditions and limitations for the client to use that money. Going from withdrawal limits to unnecessary investigations, banks deprive people from complete control over their funds, leading them to explore other options.
Crypto stands for decentralization, and although we may yet see many centralized crypto companies, the transaction system through which crypto works is completely different.
Many big financial institutions are aware that, as the world dives deeper in digitalization, the future leading financial system may involve cryptocurrencies.
That can be a problem for banks, considering crypto is a far more efficient choice for transactions and, in the case of Bitcoin, even long-term investing.
Why did crypto become so popular?
There are several factors that catapulted cryptocurrencies into mass adoption. Among them:
Almost immediate transactions, without borders and with low fees.
The transparency of Blockchain, where you can follow the trail of any transaction.
The investment opportunity of many crypto assets.
You can currently pay for almost any service in crypto. For all that money is for, users will eventually be able to get it from their own wallet.
Cryptocurrencies are money that is not tied to any territory, so in addition to using them for whatever you want, you can also use them anywhere in the world.
What does the future hold for finance?
The last two decades have been very eventful and it is difficult to predict what will happen in the future. However, it is safe to say that this technology is here to stay, managing to solve finance-related problems ever since it appeared.
Even if you don’t see Bitcoin at $1 million, the transaction system will continue to exist and will eventually become the main avenue for businesses, institutions, and retail.