Cryptocurrencies are essentially digital currencies that make use of encryption techniques for regulating the production of these currencies and verification of fund transfers.
This shows that they are independent from banking institutions and financial institutions, and risks of them infiltrating traditional financial organizations or exposing them to a bubble burst, are quite high.
Why are crypto banks needed?
As the numbers of cryptocurrencies keep growing, the demand for dedicated digital banking rises too. Companies who specialize in this field can actually offer far better terms to clients than traditional financial firms dealing in fiat currencies.
However, whether they will continue to maintain this edge remains to be seen. For instance, Bitwala, with its headquarters in Berlin, has emerged as a crypto bank and payment provider. It has offered its clients bank accounts with a Bitcoin wallet. Investors look for efficient and swift trading of bitcoin so algorithms like bitcoin superstar have emerged which predict price fluctuations of bitcoin brilliantly. Have a look at https://www.bitcoinsuperstar.io/ that provides you with a complete overview of the bitcoin predictor.
By enabling people to connect to the modern-day decentralized exchange, lending, and savings, blockchain can actually offer a great alternative to the traditional banking services. Those who find it easy to operate within this new ecosystem can wield their assets using much greater fungibility.
Crypto banks are nothing but banking institutions engaging in regular money-related activities like withdrawals and deposits, lending and borrowing, savings and investments. These are also regular functions of normal banks, but crypto banks have been able to integrate cryptocurrency into such functions.
The truth is that almost 2.5 billion people worldwide have zero access to banks and other formal financial services. Crypto banks have become the best possible solution for such a limitation. For instance, companies like Baanx.com will enable any individual or business to open a crypto bank account.
Instead of spending years to procure a banking license, this portal will ensure that eligible candidates will get to open a bank in record time using this platform. Unlike physical banking services, digital banking services will reach all kinds of places.
Crypto banks vs. traditional banks:
Crypto banks do not have national boundaries and they will not be limited by binding regulations, unlike regular banks. Numbers of clients in traditional banks may be restricted because of a nation’s systems, but in a blockchain, there is no such restriction, unless there is a technical limit.
Level of scalability is much cheaper and faster in crypto banks; each can decide value of transfers within a blockchain unlike traditional banks that have a value limit.
Crypto banks have far lower transaction costs. Time taken for processing transactions is much less and clients do not have to wait for days. Even withdrawals of very large funds can be made promptly without having to make deals or wait patiently.
New services can be integrated quickly in crypto banks.
Digital currency guarantees users total anonymity; so, each time you swipe your credit or debit card, businesses and banks can track your personal data that is attached to these cards. In comparison, crypto bank transactions will not disclose private information and so, chances of identity theft are also minimized.
While traditional banking accounts may be frozen, digital currency is outside the purview of laws and regulations, and this is never going to happen. It is rare that clients will not get to access their crypto coins. Since individual crypto banking is digital, it cannot be reversed by senders or counterfeited.