The digital currency bitcoin has recently risen in popularity, and it’s also the subject of heated debate on whether or not to accept bitcoins as an official type of payment. Banks are no exception to this debate. You can click on crypto-superstar.de to learn more about bitcoin trading.
Due to its secretive nature, banks have had mixed reactions towards bitcoin, ranging from pure excitement on the one hand, while some others refuse to treat it as a form of payment. This article will look at how the banks in Finland are affected by digital currency bitcoin.
7 Ways How Bitcoin Benefits The Banks Of Finland
1. Bitcoin is a potential new customer base for banks
Bitcoin isn’t just a black hole that sucks money like some void in space, but it has built-in mechanisms such as the bitcoin network and blockchain technology, enabling banks to carry out transactions much faster than traditional means.
According to Visa’s website, “verification of transactions is carried out by sophisticated algorithms. This happens almost instantly, but for security purposes, the transaction has to be recorded in a ‘block’ before it can be completed.”
As you can see, this new form of currency requires banks to research new ways to carry out transactions faster, which is good news.
2. Bitcoin could reduce processing costs for banks
Take a look at the processing costs when making international transfers using traditional methods; if you compare it with bitcoins, there is a massive difference in terms of price.
For example, sending money to another country is time-consuming and expensive if you go through regular banking channels. On the other hand, sending money with bitcoin is much faster; you can even watch it happen in real-time.
3. Bitcoin could increase the security of banks
Sending money to another country is time-consuming and expensive if you go through regular banking channels. Sending money with bitcoin, on the other hand, is much faster. Moreover, you can even watch it happen in real-time.
This is because Bitcoin works on an innovative technology compared to traditional methods.
Bitcoin is decentralized and secured by individuals called “miners.”
The bitcoin network creates a public ledger, so both sender and receiver have to agree to the transaction before it’s completed. This makes it possible for banks to carry out transactions without being hacked or forced, thus increasing their security levels.
4. Bitcoin could reduce the risk of credit card fraud
In traditional methods, if a transaction is incorrect or a hacker performs it, banks have to take responsibility for that erroneous transaction.
In bitcoin, on the other hand, credit card fraud is not a significant concern due to its decentralized nature.
Moreover, as the money has been sent from person to person directly, it’s impossible to argue about the incorrect transaction. This makes bitcoin a good choice for banks to avoid similar credit card fraud incidents.
5. Bitcoin can be used as an investment
Due to its high demand and limited supply of bitcoins, the price has increased exponentially over the years.
As a result, Bitcoin has become an investment opportunity for most people and thus can be bought in significant quantities by banks and other investors.
6. Bitcoin could potentially provide lower transaction costs
If you compare traditional banking methods with bitcoins, there is a massive difference in transaction costs.
Traditional banking is not only time-consuming, but it’s expensive as well. With the use of bitcoin, on the other hand, transferring money to another country is much faster.
7. Bitcoin could pave the way for new types of currencies
Many banks are working hard to create digital currencies with similar technology behind bitcoins.
Some adverse effects of bitcoin that affected Finland banks.
1. Bitcoin is anonymous
Bitcoin transactions are performed anonymously; the money is transferred from one account to another without anyone knowing about it. This could potentially open up a lot of legal issues for banks if their customers are performing suspicious transactions using bitcoins.
2. Bitcoin can be used for illegal purposes
Because Bitcoin is anonymous, it has become increasingly popular for illegal purposes. This means that banks are at risk of dealing with people involved in unlawful activities like money laundering or terrorism.
As you can see, there are both positive and negative impacts of bitcoins on the banking industry of Finland. For this reason, it’s essential to be aware of the benefits as well as downsides of this new cryptocurrency.