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Should conventional banks embrace Bitcoin?

By Guardian Nigeria
14 August 2022   |   6:32 am
Are you wondering if conventional banks should embrace Bitcoin? Here is why these banks should adopt this digital currency. Bitcoin continues to create controversy, with some banks and governments championing its legalization and others urging it's not worth consideration. Some public and private institutions have adopted this digital currency as a medium of exchange and,…

Are you wondering if conventional banks should embrace Bitcoin? Here is why these banks should adopt this digital currency.

Bitcoin continues to create controversy, with some banks and governments championing its legalization and others urging it’s not worth consideration. Some public and private institutions have adopted this digital currency as a medium of exchange and, simultaneously, a store of value. Perhaps, that’s because many individuals and merchants prefer Bitcoin for certain transactions. 

Despite many institutional investors and entrepreneurs adopting this virtual currency, mainstream banking institutions are yet to adopt this virtual currency fully. The Peoples Bank of China is the first global bank to ban the usage of this digital currency completely. As a result, the Peoples Bank of China has created its cryptocurrency, popularly known as Digital Yuan. Here is why conventional banks should embrace this digital currency.

Improving Service Delivery

Financial Institutions offer a wide range of monetary services, which include helping clients create an account and helping them send money. Nevertheless, the government regulates many activities of conventional banks in one way or another, which hinders how services are delivered. For example, when sending money globally, the transfer takes many hours or days to complete. What’s more, global transactions are pretty expensive due to the many people who are involved. 

As a result, when banks adopt this digital currency, they can figure out some inconveniences that have slowed down their operations for years. For instance, when banks adopt this virtual currency, they improve service delivery by ensuring that global transactions occur instantly and in real-time. Bitcoin has no central authority; hence the absence of intermediaries translates to speedy transactions. 

With the absence of intermediaries in Bitcoin transactions, Blockchain technology ensures that transactions are verified quickly and are less costly.

Absence of a Central Authority

Some banks are slow to adopt this virtual money because it is decentralized, meaning there is no central authority to regulate its activities. According to conventional banks, embracing this digital money would undermine the authority of banks to control transactions and therefore damage their financial transactions.

Traditional currency transactions must o through a bank. However, this electronic money allows its users to conduct peer-to-peer transactions hence eradicating the interference of banks. As a result, banks fear that this digital currency will undermine their authority as financial gatekeepers.

Increased Innovation

Since Bitcoin’s invention, it has created a lot of innovations other than finance. For example, many banks and monetary institutions are creating blockchain apps to regulate smart contracts and electronic ownership. These banking innovations will help banking companies get rid of costs and improve efficiency. 

Expansion into Emerging Global Markets

Major global financial sectors have adopted Bitcoin. A lot of business owners worldwide are now accepting Bitcoin payments. What’s more, this digital money has inspired a fast-growing market of global consumers looking for places they can transact this digital currency when purchasing products. If you are planning to start trading, you may use platforms like Bitcoin Prime Software that facilitate access to this digital currency. 

Many multinational organizations and private and public investors have vast electronic asset holdings. This virtual money is not only a store of value but also a medium of exchange, making it a substantial global resource. As a result, significant monetary institutions have no choice but to adopt and accept this digital money.

Financial institutions embracing this digital currency and including it in their daily transactions will lure clients across the globe due to the increase of businesses and people who accept Bitcoin payments.

Conclusion

The adoption of Bitcoin by conventional banks will impact financial institutions in numerous ways that other financial institutions may find risky. Nevertheless, the advantages Bitcoin will bring to the financial system outweigh the disadvantages.