The traditional banks that we are seeing right now. Their existence is under threat due to digital currency. Banking sector experts are telling that in the coming times, due to digital currency, banks can be completely eliminated. Or it may change completely in the way we are currently seeing banks.
The way we currently buy a SIM card due to digital currency. In the same manner, the nature of banks can also change. It is possible that the present form of banks may not be needed in the coming times and this will change completely. All this can be possible due to digital currency.
What is digital currency
There are currently four types of currency operating around the world. The first type of currency we call traditional currency. It is provided by a bank. The currently issued currency is issued in the form of paper or coin. Digital currency is completely different from this. And it works like a mobile wallet.
You have to do the entire transaction online and you cannot get it in physical form by any means. It is a fully virtual currency. However, it is also issued by the country’s central bank and the same guarantee is also available behind it. Which is with the currency of paper. They are legally legal. However, you cannot see or touch it in the form of paper. As we currently do with notes.
At present, most of the movement around the world is of traditional currency. Which is available in the form of paper notes. At the same time some currency in the form of coins are also in circulation around the world. However, they are short forms of currency.
Currently there are about 4 types of currency around the world and all four types of currency are legal around the world. It is the first traditional currency. Which is paper in the form of coins. At the same time, you see the second currency in digital form. Legal guarantees of governments also exist behind digital currency. However it is completely virtual and you cannot touch it. You can use this currency in online transactions.
Central banks first used gold as a traditional currency and started their earnings as an interest on gold. This was followed by a new currency in the form of paper. This currency was printed on the basis of the availability of gold. However, some banks printed currency more than the gold available here and traditional currency developed in this way. Which we see in physical form nowadays.
The most important thing about traditional currency is that there is a legal guarantee of the government behind it. And any loss you suffer is guaranteed by the government. Different countries have different traditional currencies. Such as India’s Rupee, America’s Dollar, Japan’s Yen etc.
Cryptocurrency is a new type of currency. Which has emerged as a challenge for governments around the world. Cryptocurrencies are not owned by a single person. It is completely decontaminated. That is, it is not controlled by any person or bank in the world. It functions completely in a decontrolled form.
It is said that this was also the idea behind the release of cryptocurrency. The idea of the cryptocurrency maker was how to get the currency out of the control of governments around the world. And be handed over to the market in this same way. This is why cryptocurrency was released.
Transaction of crypto currency is also done in virtual form and it is much more difficult to track. Due to cryptocurrency, central banks have been forced to move towards digital currency.
Cryptocurrency is itself a virtual currency. Which you cannot touch. If you cooperate in cryptocurrency mining then you also get some stake. The most popular crypto currency around the world is bitcoin. After this dog coin and thousands of crypto currency market is present in the same manner. It is completely decontaminated. Bitcoin is considered the world’s first cryptocurrency.
The most important thing about crypto currency is that its number is fixed. After a certain number of crypto currencies, no more can be obtained.
Crypto currency is protected by a password. If you lose that password then your cryptocurrency also loses. And you can’t get it again. This password is for one time. And it cannot be regenerated either. In such a situation, it also becomes quite unsafe. However, cryptocurrency is completely safe when viewed as a transaction.
Due to cryptocurrencies, its use in terrorist activities and other illicit activities has increased greatly around the world. In such a situation, the concerns of central governments are also increasing. China has recently banned cryptocurrencies like bitcoin completely here. Although cryptocurrency is still fully valid in big countries like US India Japan Canada Australia UK New Zealand.
Experts are hoping that central banks around the world can completely ban cryptocurrency in the coming times. However, it still has some hiccups. Countries and large companies across the world have invested billions of dollars in cryptocurrencies like Bitcoin and DogCoin Inn. In such a situation, if these banks ban these cryptocurrencies, then there is a danger of sinking billions of dollars of investment. For this reason, the central banks have not yet decided whether to ban cryptocurrency or not.
The currency that banks around the world are debating. It is a digital currency. Digital currency is completely different from traditional currency and crypto currency. You cannot acquire digital currency as a physical currency by any means. You can buy any item by doing online transactions from it. There is also a government guarantee behind this. Digital currency is issued by the Central Bank. You can use this currency as a wallet. Which is issued by the Central Bank.
However, the development of digital currency is still going to take a long time. But China has become the first country in the world to issue a digital currency in the form of yuan.
The central bank around the world has been forced to issue digital currency due to crypto currency. The idea of digital currency came about due to bitcoin and other cryptocurrencies of this kind.
The biggest difficulty of crypto currency is that it is not regulated by any central bank in the world. However, this is not the case with digital currency. Each country issues its own digital currency. And can also regulate it. Also, transactions can be monitored. But this is not the case with cryptocurrencies. To overcome these flaws, countries around the world are preparing to issue digital currency.
The US has also gone ahead in the issue of digital currency and the Federal Reserve Bank is preparing to issue a digital form of the dollar. However, a committee has been constituted regarding this and is considering it. In such a time, we can see the digital currency of America as well.
If you look carefully, the biggest problem of cryptocurrency was that it is not controlled by any person or bank in the world. Because of this, the risk is very much behind it.
The second most important thing about crypto currency is that it is much more flaccid. It is said about crypto currency that the rate of cryptocurrency can go up and down by about $ 6000 in 1 day. Which in itself is a very big number.
Stable coins are being issued nowadays to overcome this shortage. Stable coins are issued privately by these companies around the world. These companies also provide you with a guarantee of your own with stable coin.
Stable coin is said to have $ 1 US dollar in companies equal to its value of $ 1. Which guarantees that your money is completely safe.
We explain here by giving you an example. Suppose a bitcoin costs $ 100 at the moment. And bitcoin is released by Facebook. So Facebook needs to keep $ 100 in its bank balance to guarantee a bitcoin. Only then does that stable coin work. For this reason, stable coin is considered more secure than crypto currency.
However, private companies are also guaranteed behind this. In such a situation, experts are raising questions about what will happen when a private company becomes bankrupt in itself and goes bankrupt. In such a situation, who will guarantee the safety of your money? No one has the answer yet. In such a situation, stable coin is also not considered as safe from investment point of view. Warren Buffett, the world’s largest investor, says that stable coin and cryptocurrency is a gamble in itself. In which I never trust.
Talking about the stable cryptocurrency present in the world, there is a currency like usd coin tether. The back of which is given a guarantee of US dollars. However, investors advise to be cautious before investing in it too.
The most important thing about a stable coin is that there is not much change in it. Stable coins have a maximum change of only 1 to $ 2. In such a situation, they are considered more secure from the point of view of investment. However, once again remind you that there is no guarantee of any government even in stable coin and crypto currency. This is a completely private currency.
Crisis on the existence of banks due to digital currency
In the coming times, due to digital currency, banking sector may face a crisis. It is possible that due to digital currency in the coming time, you may not even see the bank. The way you currently buy a SIM card. In the same way, you will also be able to do banking transactions due to digital currency. Such experts are speculating.
The way we currently look at the payment bank. The same method of banking may be applicable to all in the coming times. Payments Bank currently operates in India. And you can transfer cash from any shop. And can do banking transactions.
In the same way, banking can also be done for man stream banks in the coming times. Due to the arrival of digital currency, the transaction will be completely online and can be seen in the form of point of sale banks only at the shops. Such experts are speculating.
The Reserve Bank of India is currently giving a lot of importance to EKYC. Video EKYC is a form of this. Currently you can open any bank account through EKYC.
In such a situation, if the trend of video KYC increases in the coming time, it will be a crisis for the banks. Because you do not need to go to the bank because of digital currency. Net banking and digital eKYC will reduce the work of banks even more. In such a situation, experts are raising the question that what is the need of banks then?
For information, let us know that you can open any account sitting at home through the Aadhar card PAN card in countries like India. And can do transactions. Because of this, there is a crisis on the existence of banks.
Establishment of Central Bank
Due to digital currency, all countries are insisting on the establishment of a central bank. If this happens, a central bank can control the entire capital of the country. In such a situation, the importance of all the presently existing banks will end.
We explain here by giving you examples. Almost all online payments in India are made by Bhima UPI. In such a situation, Bhima handles UPI, a government company of India and all banks do business through the same. If the same type of institution is created for digital currency in the coming times, then the importance of banks will disappear on its own.