Dec 17,  · If Bitcoin or any other cryptocurrency gets mass adoption, the existing banking system may get into trouble. This is a threat to the business of banks, and it can negatively impact the economy. So, banks and governments want to regulate Bitcoin. Jul 09,  · Bitcoin and altcoins are empowering users by eliminating, or minimizing, many financial intermediaries. This has the potential to be a massive disruption and opportunity. Bitcoin is P2P, decentralized, and open source. Jan 18,  · Summary Given the speed with which the Bitcoin and cryptocurrency story is moving, it will not be long before the idea of mortgage or other loans denominated in Bitcoin .

Bitcoin and banking system

Why Governments Are Afraid of Bitcoin

If you purchase bitcoins, the contents of your wallet will be bitcoins. Fiat currencies are set by government policy. A bitcoin token, on the other hand, is a fixed currency commodity. That means that the supply will not contract, and will only expand at a set rate up to a certain number of tokens in circulation. A bank account will change based on two factors: the value of the underlying currency and the value of the interest paid. Money in a bank account accrues interest at a fixed rate, set by contract between the consumer and the bank.

The currency itself can also change, typically through inflation which causes the value of each dollar in the account to erode.

Inflation is heavily influenced by government policy. In the United States, it generally stays at or around two percent per year, the target goal of the Federal Reserve Bank. A bitcoin, on the other hand, will change based primarily on market forces.

With no regulating authority, and the supply of bitcoins in the marketplace fixed, the price of a single token is almost entirely dictated by supply and demand. Where inflation in the United States averages around two percent per year, the value of a bitcoin can fluctuate by more than 15 percent in a single day.

As a result, money invested in a bitcoin can accrue far more value than money left in a bank account, but it is also subject to more severe losses.

A bank account involves merely the storage of your money. As a result, spending any of that money involves a third party transaction that fetches that cash from your institution.

This could mean stopping by an ATM or using a debit card, both systems which then check your account and transfer spendable funds accordingly. Given that your bank will hold fiat currency on your behalf, the money is universally spendable within its economy. A dollar held in a bank account can be spent on any transaction in the United States.

As an asset, a bitcoin is far less fungible. Thank you. What Is Blockchain? What Does Hodl Mean? November 16, Check Latest News Headlines. Submit a Press Release. This is still continuing, and many people suffer for their loss. So, banks and governments want to regulate Bitcoin to reduce money laundering and cybercrimes. Many cases have found that harmful chemicals, weapons are traded with Bitcoin. It was possible because it offers anonymity and privacy to users. So, criminals, terrorists found it suitable for trading illegal items in exchange for Bitcoins.

Even though the decentralization feature has some potential benefits for the users, it can create many problems for the country. Therefore, governments and banks want to regulate Bitcoin and other virtual currencies.

There are several other reasons, such as the issuance of loans, mortgages, and other essential banking activities. With Bitcoin, how can people take loans, whom they will trust and get money from? Moreover, many people cannot trust a system without any real physical existence. Additionally, the bad news of the black market in the crypto space has a negative impact on its lack of regulation.

So, these are some of the main reasons why governments and banks want to regulate Bitcoin. Even though there is a lot of payment restrictions in Bitcoin, some countries allow their citizens to invest.

Many successful Bitcoin investors recommend the www. If you want to invest in Bitcoin, understand the risk and reward of Bitcoin.

The Case for Bitcoin Banking (Despite Cred’s Bankruptcy) Why Regulate Bitcoin

Mar 02,  · Bitcoin has created a new way for people to store their money. By purchasing and holding tokens, investors can put their money into something safer, more accessible and potentially more lucrative than simply holding on to a handful of cash. There are, of course, several key differences between purchasing bitcoin and traditional banking. Jul 09,  · Bitcoin and altcoins are empowering users by eliminating, or minimizing, many financial intermediaries. This has the potential to be a massive disruption and opportunity. Bitcoin is P2P, decentralized, and open source. Jan 18,  · Summary Given the speed with which the Bitcoin and cryptocurrency story is moving, it will not be long before the idea of mortgage or other loans denominated in Bitcoin . Tags:Can i trade bitcoin on ameritrade, Trading bitcoin otc, Bitcoin trader gameplay, Bitcoin correlation stock market, Btc market close

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