Cryptocurrency May Kill Global Banks, Says Committee
We saw this coming a mile away, honestly.
Don't get me wrong: I dig Bitcoin. I'm all about Ethereum. I love the decentralization and the minimization of fees, completely and totally third-party-free and with an ironclad system incapable of being hacked at all (we think). But come on -- this is what happened to just about any currency in history. It shook up the system. Big time.
However, That's No Cause for Concern -- at Least for Us Not Working in Banks
Because cryptocurrency really isn't a typical and reliable substitute for cash, generally speaking many were always hesitant to invest in it, much less use it as a way to make payments for anything from your rent to your tennis shoes. To this day we still use cold hard cash -- whether that's in paper, or plastic, it doesn't matter. What matters is countries have their own currencies, and that's how it's been for centuries.
In comes the blockchain -- and Bitcoin, and numerous other cryptos to shake up a system that's been around that long, so of course this committee is going to issue out disclaimers.
The Basel Committee, as it's called, however admits that banks do have rather limited exposure to crypto-assets. However given the volatility and the constant up and downswing, there's still possibility of fraud and terrorist financing links. There's enough room for bad things to happen, not that the Bitcoin is a bad thing (it isn't), but instead of someone trying to break into a bank, all someone has to do is connect to the Internet (which already is facing quite the historic legacy) and do a bit of hacking to steal some money (and perhaps an identity or two).
A lot can go wrong, basically. And the committee is just making sure banks are aware.
Currently the Basel Committee Is Working With Other Boards to Set Up Standards
Clearly some policies do need to be in place. Coordinating with other authorities will make a difference in regulating how banks treat cryptocurrency from here on out. They're commodities. Assets. And, yes, cash. But they're also completely neutral, and that sometimes can be an issue if the wrong people like to take advantage of it in heinous ways!
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