banks cryptocurrency

Banks around the World are adopting Cryptocurrencies

Two years ago, only a few talked about cryptocurrencies. And the year 2017 came. Everything has changed about cryptocurrencies and blockchain tech. The market capitalization has increased tremendously. Initial Coin offerings (ICO) have took a giant leap.

At times, It was hard to believe that Bitcoin is worth 400 dollars, then it rose above 1000 dollars, and kept on increasing, and at one time Bitcoin even touched 20K dollars. Keeping the price movements apart, more and more people are trying to buy cryptocurrencies. And institutional investors have showed increased interest in owning cryptocurrencies.

Moreover, Venture Capitalists are testing the waters by participating in ICOs.

Now came the eye-opening time for the traditional banks around the world. Even central banks are planning to implement their own cryptocurrencies.

In 2015, The Central Bank of Netherlands has created their own cryptocurrency called DNBCoin, which is meant for internal circulation only, to better understand the blockchain tech and cryptocurrencies.

Ripple and Stellar

Both are payment networks, and have own cryptocurrencies XRP and XLM. Although for using Ripple network XRP is not necessary, many major banks like American Express, Santander, and Standard Chartered are using Ripple network. But XRP acts as a liquidity factor, which is essential in cross-border payments.

XRP does not use blockchain technology, however, uses Distributed Ledger Technology (DLT) that is somewhat technically different, but achieves the similar results like a blockchain does. For the record, blockchain is also a DLT.

On the other hand, Stellar also works somewhat like Ripple network. But now, it is less popular than Ripple. Organization like Praekelt Foundation, however, are using Stellar.

Conclusion

Cryptocurrencies are here stay, and it is obvious that central banks around the planet are agreeing. Maybe some banks don’t like Bitcoin, and see public digital currencies a threat to their business. But blockchain technology is embraced by most of the banks. Yes, there are few complaining that blockchain and cryptocurrencies are slow. The current research and innovation will address that scalability issue sooner.

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