Cryptocurrencies are a huge part of the financial technology industry. This is because digital or virtual currencies offer a new way of handling payments. Over the past few years, cryptocurrency marketplaces such as Earnity, the San Mateo, California-based company led by Dan Schatt and Domenic Carosa, have foreseen the effects of this technology on the banking industry.
The Promise of Anonymity
Cryptocurrencies are also pseudonymous, meaning that all transactions are recorded on a public ledger, but the identity of the parties involved are not revealed. This makes cryptocurrencies an attractive option for those users looking to conduct their transactions anonymously.
Cryptocurrencies have undoubtedly been growing in popularity in recent years, and their use is expected to continue to grow even further. This is likely to have a significant impact on the banking industry. One of the main ways that cryptocurrency will impact the banking industry is by reducing the need for traditional banking services. Cryptocurrencies can be used to conduct transactions without a bank account. This could lead to a decline in the use of conventional banking services and a dip in the revenue of banks.
Will It End Traditional Banking?
On the flip side, cryptocurrencies can also be used to evade traditional banking regulations. For example, cryptocurrency can be used to conduct illegal transactions or circumvent capital controls. This could, unfortunately, lead to an increase in financial crimes and a decline in the efficacy of traditional banking regulations.
Overall, it is clear that cryptocurrency will significantly impact the banking industry. As fintech veterans Domenic Carosa and Dan Schatt of Earnity point out, the nature of this impact is still unclear, but it is likely to be disruptive. Thus, banks and other traditional financial institutions need to start preparing for this change if they want to stay ahead of the curve.