Why Traditional Financial Institutions Do Not Like Bitcoins
The financial industry is going through a disruption. And the main reason behind it is the inception of cryptocurrencies. In 2009, when bitcoin was released investors were not able to understand the concept behind it. Many people rejected the idea because blockchain and bitcoin were very new and complex at that time. There were not many resources at that time to understand the concept.
However, gradually people get to know about the cryptocurrencies and started investing in them. But many people disappointed due to the scams and fraudsters occurred in the name of bitcoin. As it was a new concept, fraudsters used it to steal money from the public. As a consequence, many people suspected that bitcoin is a scam. Even today many people believe that bitcoin is a scam.
More importantly, the government, financial institutions were also hated bitcoin and cryptocurrencies. Although some financial institutions and banks have adopted bitcoin, there are still many bans who do not like bitcoin. Here I am going to list down the reasons why they don’t like bitcoins.
Reasons for Which Financial Institution Do Not Like Bitcoin
To be frank, most of the financial institutions do not like bitcoin mainly because of their loss in business. They fear that they will lose their position from the financial world and bitcoin might replace them. Here are the main reasons why they do not like bitcoin.
- Decentralization Nature of Bitcoin
- The Increase in Value of Bitcoin
- Investors Are Moving Towards Bitcoin
- Financial Institutions Are Losing Control and Authority
- Future Threat to Their Business
- Decentralization Nature of Bitcoin
The first thing that financial institutions, the government, and central banks do not like about bitcoin is the decentralization nature. Because a decentralized network does not allow any financial institution to get involved in financial transactions. That means a person can send money to another without the help of a bank or financial institution.
As a result, people are interested in the concept of decentralization because they do not have to visit a bank. They can transfer money without going to a bank or even without having a bank account.
2. The Increase in the Value of Bitcoin
Although many people were suspicious about bitcoin and the crypto market. But the rise and rise in the value of bitcoin attracted many people to invest in bitcoin. So more and more people started investing in bitcoin and in other popular digital currencies. This increase in the value of bitcoin was not a good signal for the financial institution. So banks and financial institutions do not like bitcoin. However, some bankers started to shift towards bitcoin and adopted it.
3. Investors Are Moving Towards Bitcoin
Most of the investors are now moving towards bitcoin. Even though many investors were initially scared for investing bitcoin due to the previous money laundering scams, now people are more careful and investing in bitcoin. As the value of bitcoin is continuously rising and people are investing more in bitcoin. Keep reading If you want to know how to make passive income.
This made most of the financial institutions a big threat to their business. Because if more people will invest in bitcoin then it will grow and it will gain global acceptance. Once it gets global acceptance financial institutions will face a lot of problems in their business.
4. Financial Institutions are Losing Control and Authority
Due to bitcoin and the cryptocurrencies, financial institutions are gradually losing control and authority over the financial transactions. As bitcoin does not require any authorization or approval for money transfer so financial institutions are losing their power and authority from the financial world. This is one of the biggest reasons why they do not like bitcoin.
5. Future Threat to Their Business
The financial institutions fear that they will lose their business in the future if bitcoin remains in the market. Many financial experts also predict that the traditional currencies will be replaced by bitcoin and cryptocurrencies. As a result, banks and financial institutions will lose their business completely.
All of the above factors show that financial institutions do not like bitcoin and other digital currencies. Even some banks have adopted the blockchain technology, but they don’t like the digital currencies. I hope that you understood why financial institutions hate bitcoin. Now, please share what do you think about this matter?