Crypto-Industry is Gaining Momentum over traditional banks, Will Banks Eventually put Cryptocurrencies to Use?

Cryptocurrencies are the one that is trending on almost all financial market platform. This is the period of change, and there are significant changes taking place as the number of financial transactions is increasing not from year to year but on a daily basis. These changes are widely driven by the crypto-industry. Financial experts assumed that by the year 2024 there will be a compound annual growth rate of around 12%. The popularity of the crypto-industry is enormous and it is still increasing.

There are banks that are using traditional currencies for centuries and are still not accustomed to technology innovation that is the use of cryptocurrency. Therefore, the traditional banks are facing major obstacles in terms of financial transaction speed that is lower than the transaction speed of crypto. However, in order to avoid the situation of being left behind, banks need to find ways to adopt this technology. Because it is the only cryptocurrency that enables improvement and up-gradation in financial services.

Cryptocurrency has the ability to solve all the issues starting from cost cuttings, removing pointless intermediaries. Also, it can cater to create a more forthright and highly functioning ecosystem. Another plus point of crypto is transparency in the data transaction process.

Potentials of Cryptocurrency Platform Compared to Traditional banks-

Comparing to the existing cryptocurrency projects, the banking sector is taking it slow and not rushing to offer cryptocurrency-based products for their customers.

International money transactions can be cheap and nuisance-free with the projection of cryptocurrencies. Cryptocurrency-powered money transfers are instant and also affordable while other bank remittance charges a round sum and takes several days to process the transaction.

Another crucial rising trend in cryptocurrency is smarter yield generation and crypto loans. Deposition of digital assets to generate yield is becoming the most demanding service as various platforms are allowing their users to borrow as well as lend crypto assets.

Investors and depositors of all kinds are entering the crypto industry. Therefore, it is high time for the banking sector to get involved with the crypto industry or to compete with the crypto industry by building up innovative technology.

Banks will have to get updated with the changing regulatory requirements. They are required to change and adjust according to the ever-changing environment. As a result, digital asset banks like Protego Trust Bank have emerged as the first crypto-native banks in the world today enabling clients to engage with the digital asset ecosystem.

Why banks should get involved in the cryptocurrency industry?

Recent industry advancement in cryptocurrency service-

Custody services-

Custody service enables the customers to hold unique cryptographic keys associated with accessing private wallets.

Easy onboarding and expert assistance-

Banks can bring new and less experienced individual investors into the process by developing tools that will facilitate the adoption of crypto by their customers.

AML/KYC Regulations-

As it is mentioned by the FinCEN, that any transactions related to cryptocurrency or any custody service conducted through crypto entities should abide by KYC regulations, this will help in avoiding nasty transactions, scams, or any illegal activity. Such regulations will help banks and other financial institutions in conducting alertness on customers involved in crypto transactions.

Security concerns-

Bank can aid in moderating the security concerns of cryptocurrency holders. Bringing cryptocurrency under bank supervision will help reduce criminal activity.

Payments-

banks can operate public blockchains like stablecoins to increase the speed of their payment process. The settlements and clearance of the processing transactions can occur at a much faster rate if banks make use of blockchain technology.

Smart contracts-

There is a reduced level of trust in an agreement made through smart contracts because the success of the transaction depends on computer code and not on individual behavior. In such a case, banks can strengthen that trust by becoming a responsible third party.

If the banks don't get involved with crypto, there is a high possibility that the crypto platforms might take over banks.