Giant Cryptocurrency Firms Take A Leap, Possibly Establishing Banks?

The notion of cryptocurrencies first stemmed in 2013 through the first ever digital currency, Bitcoin. While it took some time to get used to hearing “Bitcoin”, which to this day is somewhat problematic, between the years 2017 and 2018, more consumers have become cryptocurrency investors.

With more cryptocurrency investors comes crypto exchanges and the coins themselves. Today, the digital asset is gradually making waves into mainstream, with the total market cap sitting at a sound, $385 billion and the number of different tokens easily exceeding 1600.

Now that cryptocurrencies are starting to gain interest from investors, what can be done to help develop the rather new and young concept? It appears that some giant crypto firms might be looking into establishing banks!

Cryptocurrencies’ emphasis on decentralization has already stimulated fear in many traditional banks, so, what will the competition be like between crypto and traditional banks? Unfortunately, it’s too soon to tell, however, we can look at some of the firms who have considered crypto banking altogether. As per news.bitcoin.com, three examples have been outlined and they go as follows:

San Francisco-based cryptocurrency exchange, Coinbase has achieved increased momentum when it comes to introducing novice investors to cryptocurrencies. Features like its ease of use, convenience and simplistic design has attracted the likes of many investors, sitting at over 10 million users!

As for Coinbase’s possible involvement in a crypto bank, the news surfaced sometime in May, which emphasized the fact that Coinbase was looking into banking facets. This includes the necessary licenses, regulatory aspects and “a federal banking charter”. While the rumors are yet to be confirmed, many believed that Coinbase went as far as discussing such matters with the U.S Office of the Comptroller of the Currency (OCC) earlier this year.

About a week ago, Binance acquired a 5 percent stake of Malta-based, Founders Bank. Malta has been known for accepting cryptocurrencies and its uses with open arms, therefore Binance’s interest does not come of surprise. The Office of the Prime Minister of Malta’s Junior Minister of Financial Services, Silvio Schembri is just as excited as Zhao is and has expressed joy in having Malta be chosen as the “location of the first global community-owned bank”.

At the moment, the duo is working towards getting the required licenses and permission from the EU. According to the CEO of Binance, Changpeng Zhao, it’s the token investors that will be having a share of the bank and running it as well.

Around July 11th, 2018, it was revealed that the Litecoin Foundation together with Tokenpay, a decentralized and self-verifying payment platform, acquired 9.9 percent of German’s bank, the WEG Bank AG. Like the previous duo, this duo also works towards establishing a crypto bank that will be offering financial services to the people, with Litecoin (LTC) playing a significant role. Creator of LTC, Charlie Lee has expressed excitement in finally seeing LTC used as a mean of payment, stressing that it will be make trading LTC easier.

These are just some of many examples of the crypto firms trying to merge traditionally accepted services and banks with that of cryptocurrencies. This raises several interesting questions like: Is acquiring a centralized system, i.e. banks, the right way to promote cryptocurrencies? Or will crypto firms successfully build a bank from the ground-up and exceed that of traditional systems? How do you feel about the paths taken to further develop the relatively new market?

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