Banks Adopting Bitcoins - A Trend You Should Follow
Many people have asked whether banks are adopting the new world of digital currency like bitcoin. I have not personally had the opportunity to research this but it seems to me that they may be considering it. In fact, one of my clients recently asked me about the subject. She is an investment analyst with a large financial services firm in the United Kingdom. If you would like to get an in depth answer to the question above, let me provide you with some information on how the landscape of currency trading looks like today with respect to bitcoins and other digital currencies.
There are two types of institutional players in the world of digital currency and they are called speculators and bridge traders. According to them, they make money by trading futures contracts with the main commodity that is being traded (i.e. gold, oil, etc.). But this is only one category among the many types of players that are making an income through trading the future contracts. There is another group of players that are more focused on investing in crypto.
Banks in the United States are very good at trading bonds. They do this to earn interest for lending money to each other. However, it may not seem like they are jumping into the new world of digital currency because they have a much different incentive than the speculators. That is why you will hear a lot of discussion about banks adopting litecoin instead of settling for the old world style of trading bonds and collecting interest. If you think about it, there are probably many more institutional investors interested in digital currency than bond traders right now. That would explain the banks are already comfortable in trading this way.
But why are banks adopting bitcoins as payment for their trades? I believe this question is quite simple. The main reason is that they want to be in the forefront of the technology and in the loop with the buyers. When you consider that a lot of them have trading platforms, which are also being used by speculators, they need to jump on the new band wagon or risk not being in the loop.
Let's face it, computers and the internet are here to stay. Even though a certain segment of society still associates the web with hacker attacks and crime, there is still a large majority that uses it every day. So what happens when a website uses this new technology and puts information on the internet that could be considered untrustworthy? Well, it becomes a problem. People can't trust it. They don't know if it is safe or not.
In some situations, the government has passed laws against distributing pirated software. This is similar to what is happening with the Bit Pirate Bay. If a website allows untrustworthy material to be distributed, it becomes a problem and the government steps in to make sure the site is shut down. It's pretty clear where this will all end up.
But with the current situation, banks are looking at other means of money transmission. They have been investigating mobile communication apps like Google and PayPal. The concern isn't so much about the customers using these apps to steal money, but rather the banks accepting them. Is there really a problem here? No, it doesn't create any problems for the customers or merchants. In fact, they may find it even easier to adopt as a payment method.
So where does this leave us? Banks are certainly considering accepting bitcoins. However, we have only heard from banks that they are exploring this option. Until more news comes out, it is best to play it safe and remain on the safe side. In the mean time, play it safe and become an active user of bitcoins!
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