The banking sector is one of the largest in the global financial system. There is no way to deny this fact. Every sector of the economy depends on banks to grow, with businesses needing these institutions to access some of the most critical funds that can help them optimize their performance.
However, like all industries, banking is also experiencing seismic change. Over the years, cryptocurrencies have become a viable alternative to traditional banking, with customers preferring the speed and convenience of crypto and blockchain-based financial solutions over traditional banking. Crypto may not be perfect in its own way, but it presents the ideal access to financial services for the 21st century.
What blockchain and crypto offer
Blockchain and crypto have been incredibly essential to the growth of traditional banking. These technologies offer improved speed and access, reduced transaction costs and even optimal transparency for investors who prefer to have all their data in one place.
There is no doubt that the crypto has had its fair share of weak moments. However, there is a feeling that this is the future of money and financial services. And for many who still understand the traditional system and its flaws, finding the right link between crypto and traditional finance can be important for the survival of the latter.
Interestingly, this link may also be important for the crypto itself. The gateway to the crypto market typically trades, but these platforms remain limited in their reach. And, with many countries still having laws that prevent people from having a mix of crypto and traditional finance, exchanges have had to find their way around these obstacles.
Imagine a world where you could easily link your crypto account to your bank account. You can easily convert crypto to fiat and vice versa, and you benefit from the speed of crypto transactions in traditional finance – and in real time.
With this type of link, you get all the advantages of crypto – speed, convenience, transparency, decentralization, affordability and security – in traditional finance. You can also take advantage of higher interest rates from crypto lending services, ensuring your money is working even harder for you.
A solution like this is what Fluid Finance offers. Based in Switzerland, Fluid.ch allows users to seamlessly connect their web3 wallets to their bank accounts. The use of Arbitrum technology enables easy and transparent crypto-to-fiat conversions, allowing you to mint, trade, and perform several other transactions with your real bank account.
Banks are already queuing
Unfortunately, this also poses a problem for banks as it threatens their hegemony and control over the financial space. Banks have an incentive to remain centralized and bureaucratic, and even if they didn’t, they still have to follow the rules set by their regulators and central banking institutions – agencies that, as history has shown, are less likely to accept blockchain and crypto so readily.
Despite this blockade, banks are at least switching to blockchain to digitize their services. We have already highlighted Fluid Finance, which allows people to connect their bank accounts to Web3 wallets. Fluid Finance empowers people to have more control over their finances, ensuring they can easily optimize profitability.
But, there is even more. The platform comes with a mobile app for easy accessibility, allowing users to earn returns on their coins and put their crypto holdings to good use. And, if you’re an investor who likes to spend your coins, Fluid.ch also offers a debit card for smooth spending.
Over the years, we’ve seen several banks use blockchain technology to enhance their offerings, whether it’s JPMorgan using its own digital currency to facilitate cross-border transactions and transfers, or Ripple Labs partnering with different banks to optimize the movement of money. international assets.
We have also seen several other banks offer crypto services – either directly or indirectly – to their customers. Last year, reports confirmed that JPMorgan had started offering access to crypto funds to its wealth management clients. As the reports explained, the financial giant had placed its private banking clients in a Bitcoin fund created by the New York Digital Investment Group (NYDIG)
Seeking to expand even further, JPMorgan has begun offering access to four other crypto funds managed by Grayscale Investments and another from Osprey Funds. These investment packages include the Grayscale Bitcoin Trust, Grayscale Ethereum Classic Trust, Grayscale Ethereum Trust, Grayscale Bitcoin Cash Trust, and Osprey Bitcoin Trust. The only problem is that JPMorgan has chosen not to promote any of these moves, and access would only be granted to investors who specifically request them.
A few weeks ago, reports also claimed that Goldman Sachs – another banking giant – was looking to work with top crypto exchange FTX to offer derivatives to its clients. According to experts, Goldman has discussed with FTX regulatory assistance and a possible public listing. At the same time, the bank is looking to offer crypto derivatives by leveraging several of its tools and services.
While FTX.US (the US subsidiary of FTX) seeks to offer brokerage services for its derivatives products, a partnership with Goldman would allow the exchange to manage margin and collateral in-house instead of depending on futures brokers.
All of these developments will improve the functionality of digital assets for finance. And, with Fluid Finance providing a much-needed bridge between traditional finance and crypto, connectivity is as seamless as it gets.
Regulators are the last piece
The ties between traditional banking and crypto are undoubtedly growing stronger. Traditional banks and finance companies understand that the future of the industry is in blockchain and crypto, and they know the importance of aligning now in order to ensure their survival.
Right now, the goal is to put in place the appropriate regulatory structures that would help this link grow. Financial regulators need to see the benefits of crypto and blockchain for the same industry they monitor, and the hope is that they will catch up quickly.
It will only be a matter of time before other banks and financial institutions jump on the bandwagon and reap the benefits while giving customers what they crave. Efficiency, low transaction costs, fewer intermediaries, short processing times and increased transparency are what the future holds.