Why Do Traditional Banks Hate Bitcoin?

Banks seem to have a predisposition to despise Bitcoin and other sources of cryptocurrencies. This is despite the immense value of digital market capital, said to exceed values of $500 billion. Many traditional as well as new banks (banks that operate 100% digitally and thus operate on no physical scale).

This animosity towards cryptocurrency stems from uncertainty, lack of knowledge and understanding as well as laziness. Banks today are not willing to understand the complications and intricacies of cryptocurrency. They are already in the possession of a larger and more established business. They see no profit or gain from investing any time or money into an up and coming but currently small scale commodity.

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Banks are of a mindset built on the past. They are rather unwilling to adapt to something new. Every decision made by a bank revolves around the thought that bad things should be avoided at any cost, even if it means leaving good things unexplored. A specialist in compliance is tasked with making sure a company is always in line with current regulations. They are especially important for banks. They often spend time monitoring crypto transactions. Whenever they see any odd transaction during crypto conversion, instead of understanding it, they decide the best course of action is the easy one.

They can’t really be blamed for this mindset. For them, any mistake is an oddity, and they can be fired for this. Rather than try to genuinely understand the mechanism behind a transaction, they take the easy and safe way out for themselves and block the account.

Besides this, banks and cryptocurrencies are fundamentally different. Being decentralized, cryptocurrency does not require the involvement of any third party. This is completely contradictory to what bankers do. If the cryptocurrency were to out shadow traditional banks, bankers would lose all control of the money, being effectively replaced by the crypto.

READ ALSO: Is Bitcoin a Secure Payment Method?

Cryptocurrencies will always remain a big threat for bankers. The crypto world has grown exponentially in the past few months. There are now hundreds of ICOs (crypto’s equivalent to a company’s initial public offering) and enormous fluctuations are present in major cryptocurrencies such as Bitcoin and Ethereum.

Even though crypto is a big obstacle for banks, it is also under the scrutiny of many investors. Being a new technology, investors flock towards it, looking for potential. Some bankers have also invested in cryptocurrencies.

In the future, especially if the rate of growth is maintained, crypto can change the landscape for bankers. Many analysts predict that cryptocurrency will be the new way of buying and exchanging products and services in the future

Shahzaib Zafar

Electrical Engineer, Crypto enthusiast, a tech nerd and a developer with a keen interest in blockchain, writes daily articles about bitcoin and cryptocurrencies for blockpublisher.

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