Will banks eventually embrace cryptocurrency as an asset? That is a question that many people have pondered over but still haven’t found the answer to. If you are expecting a yes or no answer to that question, well that will be hard. However, here is what will determine if banks will embrace crypto as an asset. From there you will be able to determine the way forward.
What is crypto?
Before getting to know if banks will embrace crypto as an asset, we need to fully understand what crypto is. Crypto is a type of decentralized digital currency. The currency has no regulating authority. It is also maintained through cryptography and designed to work by using computers. Crypto does not have a central body to maintain it or uphold it. Crypto-assets can be classified into different categories such as:
- Utility tokens like lite coin
- Store value tokens.
Digital wallets like electrum are used to store crypto currencies. Blockchain is used to prevent it from being duplicated. A blockchain can simply be described as a system that prevents changes or hacks into a system. Digital currency can also be bought on various exchange platforms or traded in with another currency.
Now that we have partially understood what crypto is, let’s dive into whether or not crypto can be embraced as an asset.
Will banks embrace cryto currencies
Due to the change in the digital market, banks will eventually have to evolve with this tech-savvy world. More and more people are embracing cryptocurrencies over time. It is estimated that Investment in cryptocurrencies would have risen to close to 90% of the population. If this happens banks will have to look for ways to welcome new customers. The only way they can do this is by accepting cryptocurrency as a form of asset. Some banks such as Morgan Stanley have already launched access to digital currencies such as bitcoin. El Salvador on the other hand is accepting Bitcoin as a legal tender. This means banks are already on board with the idea. It’s only a matter of time before it is fully implemented. Some banks have even started thinking of launching their own digital currencies. This could be mean that banks are seeing potential in cryptocurrencies.
However, due to the volatile nature of cryptocurrencies, most bank managers have doubts about the asset. Cryptocurrencies are also difficult to regulate as they are not controlled by a centralized system. Cryptocurrencies also have the potential to break away from old banking systems. This would put banks out of business reducing employment rates.