indeed BTC is a technological innovation in payment instruments. but on the other hand bank cannot be replaced, because under the supervision of government, of course government must look for answers to bitcoin policy later
Government will never want to allow banks to become irrelevant and banks as well will not want to become irrelevant in the long run. As it is, there are a lot of things going on with the banking sector that shows they are trying to bring up a lot of distinctive attributes to make them be in par with the idea of using cryptocurrency and that is certainly what we need anyway. At least, the fact that it is becoming a competitive space for them makes it a whole lot enticing for all of us.
I think banks will adapt to the market. When the market uses crypto currency more than fiat, i think the banks will create their own coin and maybe their own virtual wallets. I don't think banks are dumb enough to be complacent when the crypto currency market booms in the economy. Lastly, banks are shrewed, they will do everything to slow us down.
At this moment, I am sure they are already trying to check out ways they can adapt to the market and see how they can keep being closely connected or appropriate to what is being done in the crypto space so as not to get left behind. I know bitcoin will definitely not eradicate the usage of banks, and they will still be functional, but now that they know they have a lot to do to keep the interest of the users at heart when it comes to using banks, makes it even more interesting.