Banks fiat and cryptocurrencies
As crypto experts would already know, fiat means money which the Government declares to be legal tender but which doesn’t have a…
The reason why I want to debate on this topic with knowledgeable crypto watchers is the news which I have received of late, and whose source I cannot mention here.
That source, who works in a large bank, told me that his bank is about to adopt a policy for clients who trade in cryptocurrency. One of the major parts of their policy is monitoring money that comes from crypto exchanges. What’s more, if they feel that the incoming money is coming from a non-approved crypto exchange, they would reject that money in future.
Also, if you are a crypto trader who wants to deposit large amounts directly from a crypto exchange, the bank would require some proof from your side on how you were able to generate the profit in the first place. So you would no longer enjoy the anonymity with which the Crypto market attracts new traders.
Complications of such a decision
Consider again the last two points: banks would NOT accept money from non-approved crypto exchanges and they are going to ask crypto traders about how they were able to make a profit of trading crypto.
Both these decisions could have adverse consequences for the crypto market in my opinion.
In my opinion, which I would love to get challenged provided you back your argument with some facts, such an arrangement from the banks could prove to be a death knell for Crypto. After all, the entire crypto market is decentralized, and its biggest strength lies in its anonymity.
However, if banks decide to get involved, they would break that layer of anonymity which Crypto traders enjoy and force the Crypto market to get centralized against a central institution such as a reputable crypto exchange.
If that happens, the central crypto exchange would have to regulate its clients, which means both the incoming and existing crypto traders would have to deal with stricter measures. It means that the profit margin which currently exists in dealing with Crypto would be history.
Furthermore, after the banks, it would only be a matter of time before the Governments decide to get involved, too, in the crypto market. And if that ever happens, the entire Crypto market, which prides in remaining out of the worldwide monetary system, would be killed.