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Blockchain Semantics Blog Why are Banks afraid of Cryptocurrencies?

Why are Banks afraid of Cryptocurrencies?

By Swati Keswani | April 5, 2018, 6:36 a.m. GMT

We have been hearing the hate stories of Donald Trump, everybody hates Trump in the US, but nobody knows why they hate him. They have been taking rallies on the roads but when the news reporters ask them the reason, nobody has a word against him. 

Same is the case with cryptocurrencies, Banks are against cryptocurrencies but they don’t have any solid reason to why they are against it.    

We are all aware of the PNB bank scam. The fraud committed by Nirav Modi in accordance with PNB employees, it gives a perfect definition of a perfect crime. You simply cannot take so much money without leaving your marks behind. Still, a group of smart people decided to do it. They thought they are smart. But a criminal always leaves something behind. 

We are taught by our parents that our money is safe in banks. But if this kind of scams happen, is our money really safe in banks? There is always a debate on cryptocurrencies reliability and safety. But after seeing this our money is not safe in banks as well. 

So now the question is why banks are afraid of Cryptocurrencies? 

Banks are threatening People who trade in cryptocurrencies. For Example, I have seen people receiving calls from HDFC bank that they will have to tell to Income-tax Department that they are trading in cryptocurrencies, investing in it is illegal, blah, blah. Although there are no clear regulations about it, then why are they panicking? 

Banks see cryptocurrencies as the disrupters that threaten the use case of banks. We have seen a lot of cases in countries with challenging economies, banks steal your money and can devalue it before you get the chance to spend it. For Example Venezuela and Zimbabwe where Crypto is sold at a premium. 

But we think banks are a safest of all place to put your money right? What do you get when you deposit money in a bank, you are hardly given an IOU. Best people to ask the importance of IOU are Cyprus people, ask them how reliable those IOUs are. 

One of the most significant fears for banks could be technologies disrupting traditional industries by making things cheaper, universal and faster. So what did banks do for us? In what ways has the technology revolutionized the banking industry? Yes, we got a mobile app which makes the interface a little easier, but what about interest rates, are they improved? No. What about the transaction speeds, improved? No. What about the account fees, removed? No.  

So what are banks for? Debts? Not really, we have mortgage provider for that? Loans? Nope, we have a lot of loan providers for that.  

I am not in favor of cryptocurrencies, but why are they obstructing us with unnecessary regulations, why they don’t want us to trade in cryptocurrencies? At least, until the regulations are clear.  

 

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