Although Bitcoin has been available for more than ten years, prominent banks have just recently begun to offer services using the cryptocurrency. There are several causes for this, but three crucial elements stand out:
- The expanding use of Bitcoin by both people and corporations. Banks are recognizing an opportunity to serve this expanding industry as more companies and people begin to use Bitcoin. For instance, banks may provide custody, lending, and trading services for bitcoin.
- The market for cryptocurrencies is becoming more and more regulated. As the market for cryptocurrencies has expanded, governments all around the world have begun to regulate it. Banks now operate in a more stable atmosphere and are more inclined to provide services using Bitcoin as payment.
- The creation of fresh Bitcoin tools. New Bitcoin technologies like SegWit and the Lightning Network have been created in recent years. Because of these technologies, Bitcoin is now more scalable and effective, which appeals to banks more.
A more thorough explanation of each of these elements is provided below:
The expanding use of Bitcoin by both people and corporations. In recent years, both businesses and consumers have become more interested in bitcoin. Over 46,000 establishments accepted Bitcoin as payment in 2021, and there were over 100 million users of the digital currency. The need for bank services, including trading, custody, and lending, has increased as a result of the growing popularity of Bitcoin.
The market for cryptocurrencies is becoming more and more regulated. As the market for cryptocurrencies has expanded, governments all around the world have begun to regulate it. The CARES Act, which has measures for cryptocurrency regulation, was passed in the US in 2020. Other nations are anticipated to follow the European Union’s lead in regulating the cryptocurrency sector. Banks now operate in a more predictable environment as a result of the growing regulation of the cryptocurrency sector, which has increased their willingness to accept Bitcoin as payment for services.
Banks are increasingly interested in Bitcoin now that it can be used for regular transactions thanks to this new technology.
Large banks are providing services using Bitcoin for a variety of reasons. This trend has been influenced by a number of factors, including the increased regulation of the cryptocurrency market, the increasing use of Bitcoin by businesses and individuals, and the creation of new Bitcoin technologies. In the future, it’s conceivable that even more banks will offer services using Bitcoin.
Additional reasons why major banks are accepting Bitcoin as payment include the following.
- In the rapidly changing financial landscape, banks are attempting to stay ahead of the curve.
- Banks see a chance to take a piece of the expanding Bitcoin business.
- Banks are reacting to customer demand for Bitcoin services.
- The long-term effects of large banks providing services using Bitcoin are still too early to predict. It is obvious that this is a huge development, though, and that it could have a significant effect on the whole financial system.
