What is Cryptocurrency Banking ?

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Cryptocurrency banking mainly enables clients to keep their funds in a digital wallet or spend them in the same way that they would spend traditional money . Crypto balances can be managed on exchange platforms . Bitcoin and other digital currency are the electronic version of cash . Cryptocurrency does not have any physical form . Banks play a significant role in the usage of cryptocurrency by allowing security an regulation . Banks even allow investors to earn an interest on their cryptocurrency .

What Banks Handle Cryptocurrency ?

A widely used crypto exchange WazirX ,  has listed the following banks that accept payments for cryptocurrency :Punjab National Bank , Union Bank of India , IDBI , IDFC First Bank , Federal Bank , and Deutsche Bank . These are some of the most famous and trusted banks that make payment for crypto purchases . Nowadays, a lot of banks are investing in cryptocurrency . Top 5  banks with major investments in cryptocurrency are :

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  1. Standard Chartered – $380 million and 6 investments
  2. BNY Mellon –  $321 million and 5 investments
  3. Citibank – $279 million and 14 investments
  4. UBS Bank- $266 million and 5 investments
  5. BNP Paribas- $236 million and 9 investments

Do Banks Take Cryptocurrency ?

Banks dislike digital currency and, more broadly , decentralization . There are several logical reasons why not all banks will accept bitcoin and other cryptocurrencies . Banks are afraid to deal with Bitcoin due to its inherent volatility . Banks are in the business of making money . Although the banks that do accept cryptocurrency even allow you to buy, hold and sell them through your existing accounts . The main banks to deal with in cryptocurrency in India are HDFC Bank and State Bank of India . These banks are known to promote investment in crypto in India . During the time of pandemic , the number of crypto- friendly banks can be seen growing vastly .

Can We Consider Crypto Banking Safe ?

As a result of blockchain technology ,Bitcoin and other crypto transactions may be more ‘secure’ than other types of digital transactions , such as online banking, money transfers via digital wallets , or peer-to-peer payment services . The technology used to secure cryptocurrency investments is also effective .But your crypto investment cannot be considered ‘safe’ because of value– fluctuation . There are chances that you might face risks in your crypto investment as it is a relatively new and volatile concept . It is the duty of central banks to keep an eye on your crypto investment .

Effect of Cryptocurrency on Banking

Banks can play an important role in the crypto business , by providing much-needed confidence and security in an otherwise uncontrolled environment . Adoption of cryptocurrencies and blockchain technology in general can streamline procedures and propel banking into the next era of efficiency and creativity . Although, crypto currency are , in a way , an easy target for fraud . The use of digital currency is also supporting financial system to evolve .

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Will Bitcoin Replace Banks ?

Central bank-issued digital money may eliminate the need for intermediaries such as retail banks .In the future , there is a high possibility that  even if cryptocurrency does not completely replace the traditional currency ,  people might start using a combination of cryptocurrency , stablecoins ,Central Bank Digital Currencies (CBCDs) and cash notes . Experts even suspect that crypto might change the shape of the future of finance . On the other hand , there is a reason that cryptocurrency will not be able to replace banks, and that is, that through cryptocurrency few people in the industry are able to hold a lot of power in their hands .

How Can Banks Succeed With the Use of Cryptocurrency ?

Customers can invest directly in cryptocurrencies through banks and investment companies .Banks and crypto ,if combined together ,  can be very helpful in shaping the future of a better economy . Payments in cryptocurrencies are also very secure as cryptocurrencies are digital and use encryption techniques to regulate the purchases, sales or investments , which also makes it a verifiable source .

How Banks are Embracing Crypto ?

Their strategy is twofold : they are experimenting with cryptocurrency offers and pressing regulators to develop laws that benefit banks . Some companies are offering rich clients cryptocurrency investments . Others are considering Bitcoin trading desks . In 2019 , JPMorgan launched its own digital currency .

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Content writer based in Delhi who works for Inovatiq Technologies OPC Private Limited. A true finance nerd. Interests includes investment decisions, Digital Markting. Siddhi has got degree in B.A (P) in Economics & Computer Science from Delhi University
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