The Central Bank of England says that banks will have to stand up for themselves in the face of development of cryptos
Traditional banks have dominated the market for centuries, and now their system is threatened by cryptocurrencies that attract more and more users to their side, leaving banking at a loss.
Deal with cryptocurrencies by yourself
Not to mention the development of decentralized DeFi financing, which is based on the use of blockchain-based protocols, the growing use of crypto by both professionals and individuals has shown that they are starting to do without banking. These new protocols effectively eliminate intermediaries, such as banking institutions, which have so far profited hugely from their dominant position.
Against this background, the Central Bank of England claimed that traditional banks will have to take care of themselves with the advent of digital currencies, according to Reuters.
“Our job is not to protect your business models. You will have to adapt.
Our task is to ensure that if the banks ‘business models change, we will cope with the financial and macroeconomic consequences,” said John Cunliffe, Deputy Governor of the Central Bank.
Central banks are currently working at Central Bank digital currencies (CBDC) projects such as the digital Euro, an alternative cash solution that can compete with existing electronic payment methods such as digital wallets, online banking, or cryptocurrencies.
Many traditional banks are still reluctant to give their customers access to cryptocurrency, for example, when buying Bitcoin with a credit card or Bank transfer.
Recently, the Bitcoin website.fr pointed this out again, talking about an LCLBank customer who was banned from using their Bank card to buy cryptocurrency.
There are still a lot of cases like this, with clients sometimes choosing to leave their financial institution to move to a crypto-friendly sector that doesn’t prohibit their clients from spending their money as they see fit.
Traditional banks that are also facing the emergence of Bitcoin banking cards like the Binance Card issued by cryptocurrency exchanges such as Binance or Coinbase are starting to feel the competition.
Thus, crypto competition promises to be very tough for traditional banking, which will have to adapt or disappear. But the most interesting thing is that they were left to their fate by their financial regulator, the Central Bank. So this little scare starts to turn into a panic when banks are faced with the advent of cryptocurrencies.
All PayPal users in the US now have access to crypto
But not everyone has adopted a defensive strategy. PayPal took an important step forward for Bitcoin BTC by announcing that all its users in the United States now have access to Bitcoin, Ethereum, Bitcoin Cash, and Litecoin on the payment platform.
As of yesterday, only 10% of users had access to buy and sell cryptocurrencies via PayPal, so The company integrated the service for all customers in the US.
The payment system will now compete with cryptocurrency exchanges and trading platforms such as Binance, Kraken or Coinbase. Don’t forget that this is a platform with more than 346 million users worldwide.
Thus, thanks to the power of its network and world-famous brand, PayPal can play the role of an accelerator in the adoption of Bitcoins and cryptocurrencies.
As for other countries in the world, the company indicates that it will need to wait until 2021 so that users in these countries can also buy or sell cryptocurrencies on their accounts.
So, traditional banking has only two ways: adaptation or death.