Banks, for the longest time, have had a major monopoly on financial services that the globe requires. They have positioned themselves to be the one-stop shop for most money-related matters. However, there is a shift in the air, especially with challenger banks and other financial service providers coming to the fore.
This has seen the banking sector quickly change its tune with relation to blockchain and cryptocurrency economy that is slowly building. It has seen the likes of JP Morgan go from slating Bitcoin to embracing its core technology to create its own cryptocurrency.
However, the demand in terms of cryptocurrency still heavily sits with Bitcoin – in fact, its market domination recently crossed the 70 percent market. This demand for the digital currency has sprung forward a swath of third-party exchanges to give access to Bitcoin, but herein lies the problem.
While Bitcoin is in the process of getting regulated, the problem does not really rest with the digital coins themselves. There have been no instances of Bitcoin being hacked or being broken, scammed, or leaving investors in the lurch; it has always been the third-party exchanges. These are the companies that need regulating and need to be better.
However, banks are already regulated financial service providers, so why is there not a bigger drive for banks to offer Bitcoin as another service? It would not be a difficult process to get right, but it would require the custody of Bitcoin.
Part of the reason, in Germany as an example, why banks have not started offering the sale and servicing of Bitcoin, is because it has thus far been illegal. But that is changing in the European Powerhouse, and that would be good news for the cryptocurrency.
Having banks as the custodians of Bitcoin would streamline the process incredibly well as the exchange of digital assets to fiat currency could be instantaneous and entirely secure. The banks themselves would also be under a high degree of regulation thus ensuring a much more robust ‘cryptocurrency exchange.’
It is being reported in Germany just how this bill could push Germany to the forefront of the cryptocurrency space.
“Starting in 2020, financial institutions will be able to offer their customers online banking, virtually at the touch of a button, along with classic securities such as stocks and bonds, as well as cryptocurrencies.”
“Germany is well on its way to becoming a crypto-heaven. The German legislator is playing a pioneering role in the regulation of cryptocurrency,” Sven Hildebrandt, Head of Distributed Ledger Consulting, added.