What is cryptocurrency?
It is a form of digital currency that uses cryptography and blockchain technology for the purpose of security. The currency has rapidly gained popularity in the public eye. There are many types of cryptocurrencies that include Bitcoin, Ethereum, Ripple, Bitcoin cash, Litecoin, Cardano, and Stellar Lumens among others.
Bankers are against cryptocurrencies as they are incredibly benefited in regular currencies. The banks are often focus on the extreme volatility of this currency and their potential to be used for money laundering, to keep people away from cryptocurrency. But the rate at which cryptocurrencies are growing over the last few months has made bankers to worry about their existence in future.
Okay, let’s discuss about the main reasons why bankers are against cryptocurrencies.
Comparing with large banks crypto market cap exceeds.
In Dec 2017, the market cap for Bitcoin alone went over $310 Bn, which is $100 bn more than the net worth of Bank of China . And at the same time, Ethereum has far more market cap than total revenue of Morgan Stanley (an American multinational investment bank and financial services company).
The bankers along with central banks were/are worried that the rate at which crypto market is growing will have a serious impact on their operation, therefore they started fighting against cryptocurrencies to slow down their growth rate and many banks have recently banned their customers from purchasing cryptocurrency with their credit cards. Reserve Bank of India gave 3 months of notice to exchanges and investors to take away their money from cryptocurrency, which will be ended on 5th of July 2018. So Banks are taking major steps slow down the growth of the crypto market.
Day by day increase in cryptocurrency value
Last year, Bitcoin has tremendously increased from $1000 to $20,000 within the 12 months. However, if we see now, this value has decreased by more than $10000 over the past few months.
Recent fall in price has led to some analysts speculating that Bitcoin bubble is busted. Michael Jackson a Bitcoin expert dismissed such conclusion claiming that it’s just a price manipulation and added that bitcoin haven’t reach to its upper limit yet, and it may go 100 times more worth than it is today.
Irrespective of price manipulations the value of cryptocurrency is still increasing way too fast and increase in value of cryptocurrency will attract many people to using it instead of regular currency. As a result, the bankers’ operation will be disrupted.
Decentralization
Cryptocurrency is decentralization and no one can control it. Even, it doesn’t require third party to make the transactions. This is totally opposite of what the bankers do
so with the increase in usage of cryptocurrency the bankers might lose control over money, bank customers will reduce and hence the income will go down as well.
The bankers fear that this new technology might replace them, as it takes few minutes to transfer huge fiat over a long distance securely.
So, basically they are seeing cryptocurrencies as a competitor and not as a contributor. And that is why they hate cryptocurrency.
New and complicated technology
We all know, Cryptocurrency is based on Blockchain technology which is new to us and it is complex and complicated to understand. So, bankers don’t know the actual features and potential of blockchain technology in present world.
Just as a new gadget such as a smartphone. At first, people tend to despise the new technology in the gadgets. This is not because they do not like it, but because it’s new, complicated, and may be overwhelming to use.
In this case, some bankers have no idea on how this new technology works. It is unfortunate that those who understand it, hate it.
Impossible to Track the source of funds
The other reason why bankers might hate cryptocurrency is that tracking the source of funds is impossible. There is no way that they are able to investigate the funds when sent from the cryptocurrency wallet to the bank account. With this, they cannot tell whether the money in your account is clean.
The bank could be liable for ill-gotten gains in their system. Therefore, they view this as high risks as they cannot prove how the funds were earned.
Fear of losing job
If at all cryptocurrencies will surpass the banks, they will become outdated. The bankers will be forced to look for other jobs, which might require them to study another career.
Like if ripple comes across the financial sector then FIAT money comes to an end, the banks are likely to close down. So, fear of losing job might be the factor that makes bankers hate cryptocurrency.
Conclusion
In future, when this world is fully digitalized the FIAT money controlled by bankers is likely to change. According to many analysts, cryptocurrency will be the new way of buying and exchanging products and services. Looking at the growth in crypto world in the past few months, Cryptocurrencies remain a big threat for bankers. There are hundreds of ICOs and enormous fluctuations in major cryptocurrencies such as Bitcoin and Ethereum.
Despite this being a big obstacle for banks, it is what many investors love.
However, not all bankers hate cryptocurrency. Some have already invested in cryptocurrencies, and this is the way to go accept the new technology and work along with it. This is the area to explore, people should know and start using this new technology. Taking the example of internet, during starting days people were thinking that no one going to use this complicated technology and if look at present days, people can’t live without internet.
