The War Between Banks and Crypto — Who Wins?

All these years banks have played the central role in the financial system. You were forced to go through a bank in order to save money, send money or borrow money. They dictated the approach people used to get money and they were trusted to secure money. However, there is a newcomer in the recent decade, which is cryptocurrency.

Bitcoin, Ethereum, and numerous other digital currencies have come to the world of finance. They are not reliant on banks or governments. They instead make use of technology known as blockchain. It is a new system that is fast, global, and centralized. There is a large question now that banks or crypto will win this battle?

To begin with, we shall find out what banks are. The banks are powerful since the governments support them. Banks attach themselves to your salary, your business dealings and even loans. Individuals have confidence in banks because they are considered to be stable.

When you deposit your funds in a bank, you can always get them back when you need them and even when a bank collapses the government usually comes in to bail out the customers. Banks are also useful in propelling economies through the provision of loans to individuals, businesses and governments. The world economy, without banks, will not run well according to many people.

Cryptocurrency challenges the ancient system, on the other. Using cryptocurrency, you do not require a bank to transfer money to another nation. You do not have to seek the permission of a bank. All you need is a wallet, digital and internet connection. The transactions are completed within seconds, and they are cheaper than the bank fees. This also makes crypto appealing, particularly in nations that have sluggish, costly, or mistrusted banking systems. In Nigeria, reporting on the use of crypto by many youths, they are escaping excessive fees charged by banks, and are safeguarding their funds against inflation.

The Bank vs Crypto war is not just a technological one, but also the one of trust. Banks claim that crypto is not safe enough. The price of digital currencies increases and decreases extremely fast. One could earn a lot of money today and lose all the money the next day. Several times crypto exchanges have been hacked and lost billions of dollars. Due to these dangers, the governments and banks caution the population not to use crypto as their primary currency. Banks are considered to be safe as they are regulated and insured.

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Crypto supporters disagree. People say that one cannot be completely trusted to the banks as they can go wrong in some cases. In the case of the financial crisis, most banks failed and common people were victims. Banks also tend to restrict the financial freedom of the people. They have the ability to freeze accounts, postpone transactions or lock people out of their own funds. Cryptocurrencies allow no one to manage your money. It empowers people. Crypto also gives more freedom and opportunity to many Nigerians, particularly those who are conducting online business or money sent internationally.

So, who is winning this war? The fact is, battling is being done by both banks and crypto. The world is still dominated by banks with most of the money in their hands. Virtually all the salaries are deposited in a bank account. Businesses rely on banks in the form of loans and credit. Even the governments can not operate without banks. However, crypto is also expanding at a rapid rate. Millions of individuals are investing, buying and selling it, as well as storing value in it. Bitcoin has even been accepted in certain jurisdictions such as El Salvador, as a legal tender, allowing Bitcoin to be utilized as the national currency.

In Nigeria, it is even more of an interesting story. Central Bank at one time, prohibited banks to facilitate crypto transactions yet people still used it. This indicates that when individuals have faith in something they will always know how. Nigeria constitutes one of the largest crypto markets in the world even though the government has restricted it. This is because the banking system poses a barrier, and young people are motivated by the aim of overcoming the boundaries of banking by utilizing crypto.

It is also note-worthy that the banks are not sitting down only. Even several banks are currently attempting to establish their own digital currencies, called CBDCs (Central Bank Digital Currencies). In Nigeria, there is the eNaira that is the digital currency by the Central Bank. It is how banks and governments can maintain control, and still utilize blockchain technology. However, most individuals lack trust in these digitized currencies supported by governments, as they allow complete control to banks and authorities compared to crypto which is decentralized.

When it comes to the future, one cannot say easily who will win it all. Perhaps, there will always be banks and crypto that will coexist. To enhance their services, banks can utilize some of the technology of crypto and crypto can become more stable and accepted. However, there is one evident thing the emergence of crypto has already transformed the world of finance forever. Individuals are more conscious of their financial freedom, and financial institutions are now conscious of the fact that they are not the only choice.

To sum everything up, the battle of banks against crypto is not only about money but also about power and freedom as well as trust. Banks possess history, organization and governmental support. Crypto is fast, liberated and technology. Crypto is also turning into a potent weapon in the countries such as Nigeria, where citizens are starving to get their financial lives upgraded. Who will win? The solution might not be one party totally overpowering the other. Rather, the people will be the winners, as they have increased options. The future of money will be determined by what is adopted by the average citizen whether in banks or in crypto.