Are Cryptocurrencies a Threat to the Traditional Banking System?
2021 is a year accompanied by truckloads of developments within the crypto space. More and more brands started accepting cryptocurrencies as a payment method. Not to mention projects like Überstate which is actively bridging the gap between cryptocurrencies and everyday utility. Undeniably, this is significantly surging the growth and market acceptability of these coins. Even as even relatively recent innovation, no one can deny their impacts, offering features such as censorship resistance, absolute decentralization as well as permissionless operations.
Considering the present influence and potentials of cryptographic coins, the million-dollar question is will they pose a threat to the traditional banking system? Can they take over the global financial ecosystem? Are they capable of becoming the de facto payment standard globally? Yes! Now, the questions are why and how. Dig in to find the answer!
The Traditional Banking System Is Limited
The range of limitations the traditional banking system embodies positions cryptocurrencies as an extremely better and more accessible option for consideration. If you’ve ever used traditional banks for trading, investments, money management, or any form of a corporate affair, you can testify to how difficult they can be. On top of this, it is tainted by the looming risk of losing your financial resources as a result of political fluctuations and market crashes.
The global financial crisis which occurred about two decades ago explicitly indicated how vulnerable the traditional banking system is to an economic crisis. Since then, as more people came to a realization that the traditional banking system can collapse at any time, there has been an upsurge in the demand for alternatives for securing collateral, investments, and savings. This demand resulted in the creation of BTC, and the traction it enjoyed in the following years.
The primary benefit of cryptocurrencies was to eliminate the traditional banking system, or in other words, get rid of third parties from transactions ranging from transfers, money management, as well as trading. Today, those who want to keep their money in traditional savings account yielding no interest, when they can store BTC in an Uberstate.ME wallet earning them daily REWARDS in returns annually?
The Rise of Crypto Banks
The primary feature of cryptocurrencies introduced to the financial system is decentralization. Since most of their activities are decentralized and permissionless, it is almost impossible to record a single point of failure. Besides, kudos to the peer-to-peer settlement frameworks that most of these cryptographic coins implement, they can be functional 24/7. In addition, individuals and businesses whose operations fall under places where the government holds absolute power over financial institutions and banks will greatly benefit from the financial autonomy this innovation offers.
The good thing is that even traditional banks are becoming increasingly aware of cryptocurrencies and the potential revolution they could trigger. As such, many central banks are leaning more towards incorporating blockchain and cryptocurrency-like features within their offerings.
Final Thoughts
So, is cryptocurrency posing any threat to the traditional banking system? Yes, cryptocurrencies are solving diverse pressing concerns governing the financial systems. In fact, they are onboarding more and more people to the banking sector while actively minimizing the costs of infrastructure.
Website: www.uberstate.io
Social Links
Facebook: https://www.facebook.com/purposedriveswealth/
Instagram: https://www.instagram.com/uberstate.io/?hl=en
Twitter: https://twitter.com/UberstateRIT
Telegram Official Channel: @uberstaterit
