The traditional banking system could consider adapting to the world of cryptocurrencies based on its business strategy and the needs of its customers.. Guillermo Escudero, Commercial Manager of Cryptomarket, shared with Cointelegraph en Español some statements about the current relationship between traditional banks and cryptocurrencies.
How can banks and the crypto world work together
Regarding this issue, Escudero said: “Banks and cryptocurrencies can work together. Even in multiple jurisdictions There are already corporate figures that allow an institution to offer both banking and crypto products, either in the form of debit cards, loans or even bank accounts. Then we have financial institutions, which have more restrictions when it comes to offering crypto services, but everything seems to be going so that this could happen at some point.”, he further added: “Bitcoin is here to stay and for it to be part of private systems globally, it is a matter of time in terms of adoption”.
He also remarked: “Then it remains to understand how the regulations are evolving to see if the models will be crypto companies providing services to financial entities, or financial entities offering their own in-house crypto services, always understanding that for these situations the Central Banks will have the last resort word”.
About Silicon Valley Bank
“It is one more example of how fragile the current monetary and banking systems are.. The fractional reserve only makes possible massive fund withdrawals more complex, and the constant increase in interest rates causes the bonds to lose value, except for the final sale of the bond (it is canceled for the nominal total), and in the event of eventual sales of these bonds, the same thing happens with SVB, which lost value by closing that position. Observing the behavior of Bitcoin in these situations, its principle of an alternative system to the banking system is ratified”, opined the Commercial Manager of Cryptomarket.
About the Stablecoin Swing
“Make it clear that all fiat-backed stablecoins see their financial health heavily dependent on private banking, given that if the bank goes bankrupt and does not deliver the funds, the 1:1 parity is broken due to the impossibility of access to that collateral. And SVB was not a small bank, and neither is Credit Suisse, which generates fragility in some stablecoinsand suggests that the models have room for improvement and it is important to identify the best custodian of that collateral”, expressed Escudero.
Why the traditional banking system should adapt to crypto
“Bitcoin as a technology itself cannot be stopped or banned, surely by banks or regulators They can take initiatives to block operations via exchanges, but these will not have the desired effect and they will generate a fork in the market to a black one, or to one known as p2p. Understanding this, there is no doubt that banks will have to adapt to cryptocurrencies and as mentioned before, it will eventually offer some related services”, declared Escudero.
About current relations between cryptocurrencies and traditional banking
Regarding this topic, Escudero shared: “Today cryptocurrencies need the traditional banking system, because Bitcoin price allocation and highest liquidity is given against USDT or USDC, and these projects have their collateral in banks. This means that if there are problems with these crypto assets, we will surely have a gap and friction in the order books that assign prices in the different world exchanges.”, he also added: “Or, as in CryptoMarket, we have bitcoin against the Chilean peso, the Argentine peso, the real, the Colombian peso and the Peruvian sol, which is due to the fact that we maintain bank accounts in the different jurisdictions where we operate so that users can deposit or withdraw local pesos and so you can buy or sell crypto assets”.
To conclude, Guillermo Escudero highlighted: “Does this imply that Bitcoin is 100% dependent on banking? I would say no, but today the market has evolved to a high banking relationship with crypto companies. If any prohibition were to occur as mentioned above, the crypto market would not stop its operation since it would continue as it was born, in a p2p way between people, which after all is the essence for which it was created, a payment system between people”.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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