How did banks surrender in front of digital currencies?
After the traditional banking system dominated the financial sector for centuries and helped governments control the flow of money, cryptocurrencies imposed a new reality that led to the decline in the importance of banks and the rise of a parallel market for financial services.
Since 2014, there have been plans to take control of “Bitcoin”, and Wall Street executives believed that the rise and persistence of cryptocurrencies meant a real threat to the traditional financial system.
In its report, the newspaper says,News 7“Turkish banks have long shown real resistance to digital currencies, but we have recently witnessed the gradual adoption of the traditional financial system on cryptocurrencies in light of the spread of digital payment technologies.
At the World Economic Forum in Davos in 2014, Jamie Dimon, chief executive of JPMorgan, the largest US bank, described bitcoin as a “lousy” value-preserving tool used for illegal purposes.
At the same time, a prominent lawyer in the financial sector, H. Rodgin Cohen, warned that the government is very concerned about “Bitcoin” and its uses, at a meeting where US sanctions on Iran were discussed.
But it seems that Wall Street’s efforts have failed, as the New York Department of Financial Services began issuing licenses to “Bitcoin” companies in 2015.
According to the New York Times, the number of Bitcoin users in the United States has risen to more than 75 million now, which has contributed to a significant increase in the number of digital currencies, and the number of cryptocurrency users has increased globally, and the number has finally reached 220 million users.
“Everyone is realizing that all assets are going to be digital in the near future,” says Thomas Olsen of Bain & Company, which advises financial companies on cryptocurrencies and other digital assets.
Attempts to bridge the gap
According to the newspaper, the traditional banking sector is currently trying to bridge the gap between it and cryptocurrencies, as banks want to break into this new sector, compete and make profits.، These efforts are based on two pillars:
- The first is to try cryptocurrency services.
- The second is to pressure the regulators to impose rules and laws that serve banks within this sector.
Some companies currently provide investment services in cryptocurrencies to their wealthy clients, and other companies provide investment services in the field of dealing with Bitcoin and other digital currencies.
But representatives of the banking sector believe that regulators are not moving fast enough, as the delay in adopting regulations and laws regulating dealing with cryptocurrencies wastes valuable time on banks that they can use to compete strongly in this sector, but the main reason why banks fail to keep pace with this digital boom – according to the newspaper – They initially stood in opposition to cryptocurrency.
The newspaper said that we are currently witnessing the birth of a new alternative financial world on the ruins of the traditional banking sector, as start-ups specialized in cryptocurrency began offering credit cards and loans to their traders, and investors became rapidly adopting digital currencies across the earth as well as companies, and governments began to take it seriously. .
According to the Turkish newspaper, Finance Gündem, El Salvador will soon accept Bitcoin as a legal currency, and the US Federal Reserve has begun studying the creation of its own digital currency, similar to many central banks around the world.
After the traditional banking system dominated the financial sector for a few centuries and helped governments control the flow of money, cryptocurrencies imposed a new reality that led to the decline in the importance of banks and the rise of a parallel market for financial services.
Although officials in the largest traditional banks are still publicly pointing arrows at cryptocurrencies, as the CEO of “JP Morgan” Bank, Jamie Dimon, recently said that digital currencies are “worthless”, the traditional sector has become clearly aware of the importance of engaging in the digital sector. Strong ascendant.
Last year, Bank of America received the largest number of patent applications in its history, involving hundreds of digital payment technology companies.
It is not known how the bank plans to use this technology, but it is clear that it wants to take advantage of the opportunity. “The bank sees potential in blockchain, and we are now a leader in this area with more than 160 patents,” said Mark Pepitton, a spokesman for the bank.
Other banks also rely on cryptocurrencies, with the Bank of New York Mellon and the Northern Trust providing services to their clients that help them hold cryptocurrencies.
Goldman Sachs has recently begun including digital assets in the price lists of major clients, and the bank is expected to be preparing to allow investment in crypto money in the near future.