With the recent announcement of JP Morgan’s cryptocurrency making huge headlines throughout the industry, it’s now become clear that crypto isn’t a fad. It’s here to stay, despite what many in the traditional finance industry think.
We’ve heard the term “crypto bank” in the past, but not many people are entirely clear on what this is or how such a platform would operate.
What is a crypto bank?
In simple terms, a crypto bank would be a decentralized platform that can carry out all of the same functions that a traditional bank can without the need for a mediator.
What should we look for from a crypto bank?
Like any bank, the foundation is user accounts, which can be either anonymous or identified.
Providing business and/or personal account options comes as standard with traditional banks, and there’s no real reason why this can’t be the case with crypto banks as well.
Accounts would feature services such as a multi-sig wallet, acquiring services for buying cryptocurrencies, the ability to transfer funds between accounts on a domestic and international basis without the usual high costs that we see from traditional banks.
Transfer speeds would be faster as well.
A Single, Easy-to-use Platform
Instead of having to use different apps and platforms to manage your finances, the ideal crypto bank would allow you to access all crypto services on a single platform including full account management and exchange facilities.
ATRONOCOM CEO Thomas Koller stated that:
“In this day and age, I should be able to obtain all the services I need from a single source. It should not be that we have to download five different applications for five products on our mobile phones. ATRONOCOM offers a perfect bridge between the old and new worlds by focussing on speed, transaction cost, and scalability.”
Credit facilities offered by a crypto bank, with lending that is facilitated by a blockchain-based open market could lead to more competitive and transparent interest rates.
This would be a breath of fresh air in comparison to the current credit system that many see as being unfair and controlled by a few select financial institutions to the detriment of the broader market.
ETHLend is a good example of how crypto credit could work.
Virtual debit cards
Being able to use a virtual (or a physical) debit card to make payments using crypto has long been considered the holy grail for crypto banks, offering a simplified and streamlined way to use crypto in a real-life way. Such a facility will be a must for mainstream acceptance and adoption of the technology.
Lower transaction costs
One of the most significant advantages of using blockchain technology in banking is the effect it can have on service and transaction costs.
The high costs of banking are one of the most criticized and controversial aspects of the current system, but blockchain technology could remove the need for many of the intermediaries currently used by banks to carry out daily tasks.
Crypto banks are the future
The use of digital payment methods are nothing new, and the popularity of digital currency is on the rise, so it shouldn’t be too long before we see blockchain technology playing a huge part in how our banks work in the future.