Over the past year, cryptocurrencies have attracted the attention of many all over the world. Cryptocurrency is a digital currency that uses encryption techniques for regulation of currency units and fund transfer verifications. Independent from central banks, many are curious to know how the currency is changing banking today.
It’s no secret that cryptocurrency is revolutionizing the banking industry, in ways that it delivers more efficiency, transparency, and reduced bureaucracy. Since cryptocurrency is built for digital use, it has all the proper cyber securities in place.
In the past years, we have seen a rise in data breaches and compliance issues in banks that have made people worry and question the security of their investments. The reason for this is because traditional banking is getting a bit behind technological innovations due to their set protocols that must undergo numerous approvals before they’re given a go-signal.
With that said, many are looking into the possibilities and benefits of cryptocurrency that is becoming more appealing in our modern times. For one, crypto banks have more immunity to data hacks and their transactions remain secure and anonymous.
Another reason that cryptocurrency is changing the world of banking is that it doesn’t require the need to involve intermediaries to make transactions. With cryptocurrency, no entity holds your money, instead, it’s stored on the blockchain.
The lack of intermediaries are causing some teething issues in some industries – mortgages being a common example. Director of PerthBroker.com.au, Jess Peletier notes that mainstream banking hasn’t caught up with the times in Australia at this time for verification of assets which include cryptocurrency – meaning that if you’re wanting to purchase real estate assets in Australia you need to first convert your crypto into Australian dollars to verify available funds. Lenders are currently speaking with regulators to try find better ways to manage this process which don’t require borrowers to liquidate their assets and potentially pay significant transactional costs.
When it comes to the availability of crypto, rest assured that it’s operation around the clock, even on holidays and weekends. With that said, it makes it a useful solution for businesses and individuals in areas wherein government entities and financial institutions take over traditional banks.
As mentioned, crypto is decentralized, which means that it has lower costs, which is another reason crypto remains to see an uptake.
With the advancements cryptocurrency is laying on the table these days, it only means one thing for banking — they need to learn to play a new game and keep up with the latest innovations to provide people with better banking experience. Furthermore, this means that the banking industry might want to look into traditional operational methods and see which ones can be ditched and improved to have a more fluid role in today’s changing financial conditions.
When it comes to a merger between crypto and banking, nobody is saying it’s impossible. Even experts think that the two can merge, however, there’s no promise to it. In the meantime, cryptocurrency may have to adapt to new rules and regulations that somehow grounds it and slows down its technological advancements, which buys more time for banks to keep up and evolve with the technology until cryptocurrency evolves once again into something more advanced.
So, yes, cryptocurrency is changing the banking industry but if you think about it, it’s pushing traditional banking to adopt the new ways in our current fast-paced world, which, if you think about it, is going to be for the best as we are already in the future. And the only way to go now is forward and upward.