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The banking sector is one of the most important to the global financial system. There is no way to deny this fact. Every sector of the economy relies on banks to grow, with companies needing these institutions to access some of the most critical funds that can help them optimize their performance.

However, like every industry, banking is also seeing a seismic shift. Over the years, cryptocurrencies have become a viable alternative to traditional banking, with customers preferring the speed and convenience of crypto and blockchain-based financial solutions to traditional banking operations. Crypto might not be perfect in its own way, but it presents the ideal access to financial services for the 21st century.

What blockchain and crypto offer

Blockchain and crypto have been incredibly critical to the growth of traditional banking. These technologies offer improved speed and access, reduced transaction costs, and even optimal transparency for investors who prefer to have all their data in one place.

There is no doubt about the fact that crypto has had its fair share of weak moments. However, there is a sense that this is the future of money and financial services. And for many who still understand the traditional system and its flaws, finding the right link between crypto and traditional finance can be important to the survival of the latter.

Interestingly, this link can also be important to crypto itself. The gateway to the crypto market usually exchanges, but these platforms remain limited in their scope. And, with many countries still having laws that prevent people from having crypto and traditional finance mixing, exchanges have had to find their way around these hindrances.

Imagine a world where you could easily link your crypto account to your bank account. You can easily convert crypto to fiat and vice versa, and you get to enjoy the speed of crypto transactions in traditional finance - and in real-time.

With this type of link, you get to enjoy all of the benefits of crypto - speed, convenience, transparency, decentralization, affordability, and security - in traditional finance. You can also leverage the higher interest rates of crypto loan services, ensuring that your money works even more for you. 

A solution like this is what Fluid Finance provides. Based in Switzerland, Fluid.ch allows users to seamlessly connect their web3 wallets with their bank accounts. Using Arbitrum technology, allows for easy and seamless crypto-fiat conversions, allowing you to mint, trade, and conduct several other transactions with your actual bank account. 

Banks already falling in line

Sadly, this also presents an issue for banks because it threatens their hegemony and control over the financial space. Banks have an incentive to remain centralized and bureaucratic, and even if they didn’t, they still have to follow the rules set by their regulators and central banking institutions - agencies which, as history has shown, are less likely to accept blockchain and crypto so easily.  

Despite this blockade, banks are at least moving to blockchain to digitize their services. We already pointed out Fluid Finance, which allows people to connect their bank accounts to Web3 wallets. Fluid Finance makes it easy for people to have more control over their finances, ensuring that they can easily optimize profitability.  

But, there is even more. The platform comes with a mobile app for easy accessibility, allowing users to earn yields on their coins and put their crypto holdings to good use. And, if you’re an investor who loves to spend your coins, Fluid.ch also offers a debit card for seamless spending. 

Over the years, we’ve seen several banks using blockchain technology to improve their offerings, whether it is JPMorgan using its own digital currency to facilitate transactions and cross-border transfers or Ripple Labs partnering with different banks to optimize international asset movements.

We’ve also seen several other banks offer crypto services - whether directly or indirectly - to their customers. Last year, reports confirmed that JPMorgan had begun offering access to crypto funds to its wealth management clients. As the reports explained, the financial giant had been placing its private bank clients in a Bitcoin fund created by the New York Digital Investment Group (NYDIG)

Looking to expand, even more, JPMorgan began offering access to four other crypto funds managed by Grayscale Investments and another from Osprey Funds. These investment packages include the Grayscale Bitcoin Trust, Grayscale Ethereum Classic Trust, Grayscale Ethereum Trust, Grayscale Bitcoin Cash Trust, and the Osprey Bitcoin Trust. The only issue is that JPMorgan chose not to hype any of these moves, and access would only be given to investors who specifically ask for them.

A few weeks ago, reports also claimed that Goldman Sachs - another banking giant - is looking to work with top crypto exchange FTX on offering derivatives products to its customers. According to experts, Goldman has been talking with FTX over regulatory assistance and help with a possible public listing. At the same time, the bank is looking to offer crypto derivatives by leveraging several of its tools and services.

With FTX.US (the American subsidiary of FTX) looking to offer brokerage services for its derivatives, a partnership with Goldman would allow the exchange to handle margin and collateral internally instead of depending on futures commission merchants. 

All of these developments will improve the functionality of digital assets for finance. And, with Fluid Finance providing a much-needed bridge between traditional finance and crypto, connectivity is as seamless as possible.

Regulators are the final piece

The links between traditional banking and crypto are undoubtedly getting stronger. Banks and traditional finance companies understand that the future of the industry is in blockchain and crypto, and they know the importance of falling in line now in order to ensure their survival.

Right now, the goal is to build the proper regulatory structures that would help this link grow. Financial regulators need to see the benefits of crypto and blockchain for the same industry they are policing, and the hope is that they get to catch up quickly. 

It will take just a matter of time before other banks and financial institutions jump on the bandwagon and enjoy the benefits while giving clients what they crave. Efficiency, low transaction costs, fewer intermediaries, short processing times, and increased transparency is what the future holds.


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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