Will Bank-issued Cryptocurrencies Overtake Bitcoin and Altcoins?

News / 18.01.2020

The cryptocurrency domain is fearful about something. The fear is about cryptocurrencies issued by banks replacing Bitcoin as well as altcoins.

However, to ascertain the validity of the fear, it is necessary to consider some facts. The first thing to consider is that such bank-issued cryptocurrencies will be centralized; that is, banks will be in charge of those who receive the cryptocurrency units and what they can be used for. Contrariwise, Bitcoin is a decentralized currency.

Holders of Bitcoin can determine what to use it for. It can be used for the payment of goods and services, forwarded to people through remittance platforms, or can be kept for speculative uses.

The original intention of developing Bitcoin and most cryptos is to offer financial independence to the people. When banks are in control of finances, it may be difficult at times to secure access to necessary tools and services for survival.

For instance, individuals with weak credit or job history may not find a bank helpful. Banks may likewise reject their applications for credit or debit cards, not allowing them to make everyday purchases. Notwithstanding, it is not the same with Bitcoin as people have control over its use.

So far, some countries have revealed their plans to launch their centralized forms of cryptocurrency or have already launched it. Venezuela launched the Petro currency in 2018 to fight U.S. sanctions.

Besides, China has also revealed its plans to release a digital form of the yuan. Despite the fact that the digital yuan is yet to be launched, the government has passed laws towards its easy development.

Hence, with all the events so far, perhaps there is no need to worry. As centralized currencies keep coming, many people utilize Bitcoin due to the inability of any single governing system to control it. Such people desire privacy and safety for their monetary activities, and it is not likely that they would prefer another environment.

Therefore, despite the likelihood of some plans for centralized digital currencies to be successful, Bitcoin and other cryptos are likely to be intact and also keep growing as people look out for more privacy options and powerful control.

Featured image courtesy of Shutterstock. Source: Cryptopress.

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Debasish Das is from India, an engineering graduate and holds a postgraduate degree in management. He has 10 years of experience in the financial sector, having worked for one of the biggest MNC banking groups in the country. Currently he has business in e-commerce, insurance and consultancy. As an avid blockchain and cryptocurrency enthusiasts he believes in investing in the future of technology, and feels this is going to make the world a single marketplace and also give the power from centralized banks and governments back to people.