For years, crypto enthusiasts have been insisting that cryptocurrency will change the way we treat money. With the very recent rise of Bitcoin banks, that positive change could be looming. In theory, if these new types of banks are successful, the traditional banks might be a thing of the past. However, bitcoin banks could just replace the old system by being centrally regulated, without the freedom the bitcoin idealists are imagining.
Since Bitcoin emerged, there has been a non-stop innovation of crypto services. A new market of competing for stable coins is emerging, and there is a focus on security, convenience, and speedy transactions by all the major crypto services companies. To say the least, the crypto world is ever-expanding, and the concept is systematically pushing its way into the mainstream.
Stable coins were originally designed in order to minimize volatility and the risk involved in investing in them. Although most currencies fluctuate, fiat currencies are much more ‘stable’ assets to hold than cryptocurrencies. So stable coins are connected or ‘pegged’ to a fiat currency, or some other external reference in order to minimize this fluctuation.
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Recently, a lot of major players are coming out with new stable coins, which will hopefully help move crypto into the mainstream even further.
One of these so-called Bitcoin Banks is the Chinese crypto exchange platform Huobi. Although the Chinese company started out as an exchange, they are slowly moving toward this new era and offering banking like service to their customers.
As an exchange, they are doing huge volumes daily, over 1.1 billion worth to be exact. They have their own stable coin (HUSD) which is pegged to the US dollar. They also offer fiat withdrawal and have a reserve fund in case of emergencies worth 20,000 BTC.
Binance Introduces Stable Coin
Binance is no exception to this trend and is planning on releasing an open blockchain project, dubbed ‘Venus’. Venus aims to aid in the development of these pegged stable coins and digital assets. Although the company is already pretty involved in the stable coin business and are also developing 2 new stable coins. The first is linked to the British pound (BGBP) and there is another pegged to Bitcoin (BTCB).
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There are a few things that need to happen as crypto makes the transition towards a mainstream future, however. Government establishment of the blockchain and stable coin in the financial sector and regulation with protections are both important factors when it comes to the success of Bitcoin Banks and stable coin.
In another big move by one of the crypto giants, Coinbase recently decided to acquire Xapo, a crypto asset storage group. Coinbase has been a big player in the industry since 2012, they already service over 42 countries and have 20 million customers worldwide. By acquiring Xapo, this customer base will only expand and grow.
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This move will also make them the largest digital asset custodian. Coinbase also holds its own stable coin. With an emphasis on reliability and ease, their stable coin (USDC) is pegged to the US dollar.
Unlike the US dollar though, it is not necessary to live in a particular area of the world, nor hold a bank account if you want to possess their stable coin, making it accessible to a much wider range of people. Coinbase also prides themselves on low-cost transactions of their very own USD Coin.
Japanese company Coincheck is yet another big name in bitcoin banking. Their services include lending, business payments, and bill payments through their platform with stable coin and other cryptocurrencies.
Bitcoin Suisse was created in 2013 and offers financial services for crypto holders (another bitcoin bank) and offers lending, staking, and brokerage along with storage of cryptocurrency. They also hold their own stable coin that is linked to the Swiss franc (XCHF), as they are a swiss company.
Crypto believers might say that this development of Bitcoin Banks will replace the traditional banks. It does seem as though the public is demanding ease and low-cost solutions for transactions, and crypto is the answer to this need.
More and more people are investing in digital assets every day, and many of them are looking for a convenient way to store and transact these assets, something traditional banks just do not offer. However, only time will tell whether this interesting new revolution will be successful or not.