I recently spoke about the new regulation surrounding banks being able to custody cryptocurrency in the US, well not really crypto, mainly BTC and I'm sure any alt looking to cosy up to the establishment, IE XRP will be looking to get themselves more in-depth into the banking system.
I spoke about the double-edged sword that is banking holding crypto funds, but what I think is going to happen is they're going to get your funds whether you like it or not. Banks appeal to normies, and many cryptocurrency holders are anything but, they hate banks, they want to move away from finance 0.1 and want to hold their own.
Yes, there are those getting into it for the speculation and want more fiat at the end of the trade, and for them, they'll be happy to work with the banks. Those crypto holders tend to be the ones who leave their crypto on exchanges.
At any given time, centralised exchanges are sitting on millions if not billions in crypto. Some may be in cold storage, others may be insured, but we know they're not the safest place to keep your funds.
While banks can provide safety, do we want to use them? Not really, which is why I think we're going to see equity stake sold off by traditional crypto companies or fully being acquired by banks.
Not in it for the tech, in it for the payday
There are plenty of tech companies in crypto who are not in it for the tech, but in it for the payday. If the banks came along tomorrow and bought 10,15 or 100% stake in an exchange at a favourable exit price. Who is going to say no to that? The investors and tech entrepreneurs are going to jump at their chance to get a big pay off, and I don't blame them.
As for the banks, they can then instantly acquire customers and their stake sitting on exchanges. Depending on the bank, some may want to be silent owners; others will promote a bank now backs the exchange.
I think once the first exchange sale goes through you'll see many chomping at the bits to buy up exchanges and secure their avenue into crypto.
DEX's are going to be far more important
If we start to see these acquisitions go through, then the DEX market will need to get its act together. We will need to see better ways of non-KYC P2P fiat on-ramps into crypto and improve the ability of DEX if we are still to be able to trade without the banks being involved.
I don't see banks who custody crypto as a bad thing for normies but for us who have graduated past this and want physical ownership of our crypto, we will need new options.
If you hated centralised exchanges before, you're probably not going to like them going forward once they become fronts for the banks.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
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