Bank vs Crypto – Making a Choice

Over a decade ago, Bitcoin gained popularity worldwide. I think it’s important to note that today,  Bitcoin has achieved a position as the most well known cryptocurrency in the market. 

Over the years, blockchain has become known as the technology that brought Bitcoin to life. 

Advocates of cryptocurrencies often claim the main advantages over traditional banking systems: they are fast, and they are cheap – this mirrors the capitalistic society where people are drawn to efficient and reliable services at a low-cost.

When international businesses are faced with a choice between waiting 24 hours or more for a wire transfer or paying huge fees for express transactions, Bitcoin sure does sound like a good alternative.

So let’s see how far banks and crypto differ. 

Traditional Money vs CryptoCurrency 

So let’s start by distinguishing traditional money and crypto. To put it into perspective, the main difference between traditional money and cryptocurrency is that crypto is a decentralized and often global digital currency.

This also means that it is independent from the control of any government. As a result, many people prefer using cryptocurrency as they gain more control over their transactions. 

Advantages of Decentralized Financial System 

The main advantage of cryptocurrency is the ability to function independently. Most of the cryptos are based on P2P settlement systems and are fully operational at any given moment in time.

Due to its independent system, cryptocurrencies offer businesses and individuals many advantages wherein government entities often control banks and financial institutions.  

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Are Cryptocurrencies Legal?

As with many things that governments cannot control, there has been much debate over the legality of cryptocurrency in various countries around the world. Both governments and their central banks have raised various points of concern regarding cryptocurrency, but in many areas the debate is still ongoing.

In this research done by Reuters, the team has looked at governmental attitudes toward cryptocurrencies, not limited to Bitcoin alone. The picture produced across the world is patchy. Some countries have become global advocates, while others have actively banned cryptocurrencies completely, with various shades in between.

Among the concerns that they have regarding cryptocurrencies are:

  • Lack of regulation
  • Lack of Control
  • Potential to diminish effectiveness of fiscal policies
  • Crime (e.g. money laundering)

However, since each country usually has their own policies and whatnot, the status of cryptocurrency ranges far and wide. Reactions to have have fallen into a few broad categories such as;

Complete bans

Some countries have completely banned the use of cryptocurrency. For example, Algeria prohibits the purchase, sale, use, and holding of cryptocurrency. Egypt meanwhile has classified all commercial transactions in bitcoin as ‘haram’ (meaning unclean, or forbidden by Islamic law).

Partial bans

In countries such as Bangladesh and Iran, there are no regulations banning the possession, trade,or use of cryptocurrency. However, financial institutions in the county are not allowed to facilitate any such transactions.

The terms of partial bans vary widely,

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