Bitcoin Threats The Global Banking System
The Central Bank of Turkey admits that Bitcoin can eliminate the need of banks in the future.
A few days earlier, Murat Cetinkaya (Turkish Central Bank Governor) stated that Bitcoin could lead to worldwide financial stability. This is because it’s decentralized and it has P2P (peer-to-peer) financial network.
The decentralized nature and structure of the cryptocoin totally eliminate the need for central authorities or entities. Every user within the cryptocurrency network can receive and send transactions without the necessity of intermediaries.
Bank of Finland’s research paper refers to Bitcoin as an amazing decentralized financial network. It operates with its own rules and monopoly, resulting in creating actually a new economy.
Some central banks and governments including the Central Bank of Turkey are anxious about the impact of the digital currency on the global finance industry. Also, they worry about how it will continue to evolve into a premium store of value, as it’s possible to eventually overtake gold and maybe reserve currencies like Dollar or Yen.
Bitcoin could be a major part of the global financial industry and compete against fiat currencies and central banks. As long as it continues to grow at a rapidly increasing rate in terms of daily trading volume, daily transaction volume, adoption by major financial institutions, user base, and infrastructure.
Furthermore, Mr. Cetinkaya added that virtual currencies bring a new risk to central banks. They are threatening their control of price stability and money supply and the transmission of monetary policy as well.
However, the Turkish banker admitted that cryptocurrencies can be an important component of a cashless economy. In addition, the technologies they use can improve the payment systems.
Bitcoin Is a Challenge For Central Banks
Bitcoin is somehow a challenge for the most central banks and governments. The authorities have to make a choice: adopt and support it or reject it, probably hurting the economy.
The global fiat currency system and the deceitful actions of the commercial banks, give Bitcoin the chance to evolve into the next global currency. This is the reason that the Central Bank of Turkey feels scared by the rapid growth rate of the major cryptocurrency.