It appears as though the discussion of “the general population’s cash” has begun to sting the ears of the individuals who traditionally have an imposing business model of cash, banks and governments.
The latest negative statements by powerful bank organizations, and governmental crackdown on cryptocurrencion and ICOs(Initial Coin Offering) can be viewed as fightbacks by these organizations to the developing prominence of Bitcoin.
The most dominant digital currency, Bitcoin, has always had the potential to be the currency which would be free of control by the big powerful banks, however as adoption has spread, the risk has turned out to be genuine.
Constraining its potential
It ought not be viewed as shocking that big banks, for example, JP Morgan, are spilling vitriol and talk about Bitcoin being “fake” and a “fraud”. Bitcoin achieving mass adoption and succeeding spells the end for powerful banks and traditional financial institutions.
The same goes for governments. A decentralized currency takes a colossal amount of power and influence out of the hands of the government who look to keep tabs on currency within their borders. Taxes and regulations of money is a powerful tool for governments.
There has even been discussion about how Bitcoin is the most swarmed trade, showing that traditional exchanging is unmistakably taking a hit.
The concerns for the traditional
With an effective digital currency, big powerful governments will lose seigniorage income—the advantages derived from printing cash, and they will lose the competence to control the economy.
For the banking sector, losing the strenght to handle the cash that streams between central banks and the economy is at the core of the banking business and the very existence of the monetary economy.
Unjustifiable feelings of dread?
These feelings of dread may well be excessively strong in spite of the fact that Bitcoin goes against a traditional monetary economy, and it is a decentralized network, there is an understanding that it can be supplementary instead of an undermining technology.
Apostolos Pittas, adjunct professor of economics at LIU Post, has said:
“Digital currency, as is the case with Bitcoin, helps to smooth the lending process. Recall what happened in 2007-2008 during the financial crisis. Credit dried up as banks stopped lending, and the markets froze. With a digital currency like Bitcoin, lending is decentralized, or peer to peer, and as a result, lending may continue, allowing money to reach those who need it.”