Topic: Effect of Bitcoin on Bank Deposits and the Economy (Read 328 times)

I think there have been implications that Bitcoins can be used to secretly launder money outside the country. Central banks across the world have been wary of Bitcoins as an uncontrollable and unpredictable form of currency. Cryptocurrencies are leading to loopholes in the current bank’s data about the money transactions leading to inability to track economic activities. Crypto and Cyberspace has emerged as a power in itself thus bringing a check on the activities of the so powerful governments.

It will have a negative effect believe me, that is why they are against bitcoin, bitcoin can suck an almost unlimited amount of money and that will be money no longer in the fiat system, governments will print more money but this is going to create inflation and more people will put money in bitcoin.

The impact of Bitcoin on the bank as well as the financial industry in the future is inevitable if Bitcoin, as well as the cryptocurrency, are accepted as legal currency. Because offline currency will be completely replaced by the cryptos at that time. The economy will be affected and changed quickly.

So far banks have seen a surge in activity and fees off the back of the cryptocurrency boom. The economy in Japan has had a .5% growth because of all the crypto activity.

You are basing your argument on a wrong assumption. Bank deposits and bitcoin are totally different types of investments. People holding bank deposits tend to avoid risk and don’t care about high returns. Those people who have historically preferred bank deposits could have invested in risky stocks and they didn’t. Why are going to switch to bitcoin now?

The switch is mainly from stocks to cryptos but not from bank deposits.

Great question you have there pal, have been askijg myself the same question for quite some time also, but it think i get it now. You see, what i thought was this is gonna be impossible to happen. You know why? Because the governments will adapt together with the banks, one way or another, they will find ways to attack crypto people. And then the crypto world. Because they have already thought about this question also. And clearly, there are a lot of spies here observing everything and devicing a plan to tyrn the tables and make the governments and banks have the most benefits from this new trend. This will either fuse fiat and crypto or destroy the whole crypto world as a whole. Either way, it won't be good for any of us crypto users and lovers.

I do not think that bitcoin will have a negative effect on the banking system, which will lead to a reduction in bank accounts. Just people will use bitcoin as gold as an asset to multiply their money.

Since people has already earned thru bitcoin or other cryptocurrency, bank has been actually grow and had increase its depositors due to this kind of industry, so if it has an effect and that is the effect of increasing the economy, so crypto really has a positive effect for all of us.

I do strongly believe with whatever you say. Bank deposits do not affect much due to bitcoin transactions. Almost each bitcoin transaction is made with respect to the bank account and also it helps the bank to maintain a good interest rate on the amount of money the account has. I think, it is much profitable for both banks as well as the individual selling bitcoins.

I don’t think bitcoins have much impact on the bank deposits. Yes bitcoins can surely help the nation to grow its economy as the more number of people's will earn bitcoins to more economic rate will go high. If there is a nation which has each individual in the country related to bitcoins than each individual there will earn a good number of profits each day and the nation will then become the richest nation soon.

Currently i do not think that it has such a bad effect on banks or economy instead it turn the economy of some countries as more better because bitcoin is reducing the unemployment number of people. in future we can expect that bitcoin will even increase the efficiency of banks and will continue increasing the economy of the people and countries.

Whiles Bitcoins is going to make it's investors rich meaning anyone who buys and hold will get some good profits but when it comes to banking, its only the bankers that get rich because they use their customers for their own business and what makes the economy of a country grows is when people buy and sell a lot. Because with every purchase the government make money with taxes that are paid.

It may have an impact especially for the unemployment rate in a certain country wherein the unemployed may have the chance to earn and profit through involvement of bitcoin.

Бeз cпopнo влияниe биткoйнa нa экoнoмикy бaнкoв cкopo бyдeт oщyщaтьcя, кaк тoлькo y ниx нaчнeт нe xвaтaть лeквиднocти oни бyдyт лoпaтьcя. Boт тoгдa бyдeт жapкo. Пoкa eщe мнoгиe дepжaт дeньги нa дипoзитax, тaк кaк нe вepят в биткoин, cкopo вcё измeнитьcя.

It depends on how many percent it decrease on a country or worldwide, lets say that in a certain country bank deposit has lessen and people there do invest their money into crypto currency.

Banks will need to find a good investment for their depositors money so that they can pay for all the expenses that the company is needed if not, they will just have to apply a bankruptcy and the main bank that regulates the network of bank in that country will start to investigate why did it went bankrupt, and along their investigation leads to people doing crypto currency, actions will be taken by the government.


The effect will only take place if almost all of the people living in a particular country is on crypto currency, effects may vary on different situation that a country is facing, economy wise it wont affect much as people pay taxes to the government from daily necessity they bought everyday to annual income tax.

I don’t really think so. Bitcoin doesn’t reduce the amount of money that is being deposited in banks. You’ve all forgotten that Bitcoin is just a digital, and the companies that runs Bitcoin has a bank that manages their account. So I believe when the money is sent, it gets deposited in the country’s bank account.

Yes that is very right and specially in modern world people are now taking more interest in bitcoin and other  online currencies and therefore they will avoid banks to deposit their money there. but i think that when states will start accepting bitcoin as legal currency then banks will also start accepting bitcoin and through this will bitcoin will surely survive.

The amount of money that banks can create will diminish, the government will need to begin to print that money to keep banks from bankrupting and this in return will create inflation and and a greater mistrust in governments and banks creating a self sustaining loop.

Banks are centralization whereas Bitcoin is not. Of course will not affect each other. If any later many people are more interested in saving money in the form of bitcoin, of course the velocity of money in the community becomes less. This can lead to inflation, basically this is the form of regulatory obstacles from the government itself where the money of society will be many are outside the region.

It will decrease the amount of money deposited on banks because some people will going to convert ther fiats into virtual currency which is safe and you would have the control over your money and so the economy's fiat usage will decrease also but there is an adverse effects such as the increasing of cryptocurrency on a particular country and helps the economy to increase its rate.

I think if the level of banks go down or as per your saying if people do not put any money into bank then obviously this will effect the economy in negative way. This is the reason government and financial institutions  hate the black money thing where most of the economic strength goes down due to hidden money. This puts pressure on the central bank to print more fiat which demonetises the fiat value and thus leads to financial crisis.  I think similar effect will happen if people start putting everything into crypto. This will lead crypto to catch up new market but I’m sure before that could happen government will ban such deposits outside the bank if they are being done over the limits.

Yes, this can surely happen. Even now, in my region students across the globe come here for educating themselves and to acquire university degree. Then they try some kind of startup and settle up their life there with good profits out of that startup. People's usually look at a chance to start a new startup as a investment and to start learning good profits out of it. Also many new flourishing sectors can come out to help the nation to be rich enough.

I don't think bitcoin decreases bank deposits and instead increases bank's clients as well as deposits because like me every bitcoin I earn from signature campaign and trading was converted into fiat then I transfer to my bank account because I'm afraid the value will go down and for the economy I think bitcoin has help the economy to grow by helping people to earn and become financially stable.

I think the cryptocurrecy has a negative effect on the banks but this might turn out to be a good thing for people, because the banks will need to make new, more afordable packages for its clients to keep them. The cryptos are like a new big and powerful bank.

The deposits in banks maybe lesser due to more investors are coming to crypto market everyday.But still people don't have good trust on bitcoin or other crtptos so it doesn't affect on big scale for now.But in future the crypto currency investments leads to shut down of many banks due to insufficient deposits or investments on fiat.So banks are trying to create their own cryptos for securing their future.

At the current state of things, it could certainly stifle the economy and eventually lead to stagnation. I believe the economy and banks will adapt to that situation though. Exchanges act kind of as banks, in a sense that they keep people's coins, so it's not too much of a stretch for them to also try lending. Banks could diversify and also act as exchanges. I honestly don't know though, I feel that I'm too short-sighted lol.

What may be more concerning is the fact that Bitcoin is deflationary, and we see the effect that it has on people; everyone HODLing instead of spending.

If this were the case and more savings went into the crypto system then more people may choose to invest in start up's.
This in turn would change the way companies are created and could help provide new flourishing sectors.

The effect of bitcoin into banks deposits is growing up, many people earn from bitcoin are keeping their money to the banks, and the economy also developed and improved because of the total income of people who access bitcoin, eventhough the income from bitcoin are not directly collected a tax but still the bitcoin can contribute to economic development because the money from bitcoin will used to transact some businesses in public or in governments businesses.

now crypto is a form of investment that has a high asset value so this is of course not impossible if many people will switch from doing bank deposit activities to make an investment on crypto and of course this will have an impact on economy. I think this will push the bank system that will adopt blockhaind technology to re-attract customers to deposit at the bank. and I think in the days to come there will be a lot of banks that follow the blockhaind system.

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This looks like a discussion on whether banks or crypto are better at stimulating economies, empowering small businesses and creating jobs.

These days, I think credit cards actually provide more stimulus than bank loans. Crypto has historically been weak in terms of the loan industry. Collateral based loans have been difficult to come by in crypto and verification or other methods of enforcing loan repayment have never worked well.

On the intangible side are the numerous small businesses and industries which have popped up as a result of crypto's introduction. The benefits provided by crypto liquidity providing electronic merchant transactions to those living in poverty who could not afford the minimum balance of a bank account. There are a large number of intangible benefits provided by crypto which could easily overshadow any proposed benefits provided by banks or credit card companies.

In terms of real world application, I would say that bitcoin and crypto have done more to empower venezuelans than banks have. If that precedent holds true to the rest of the world, then bitcoin and crypto definitely create more jobs, provide more economic stimulus and benefit to people of the world than banks or private sector industry.

Logically bank deposits can increase if you assume bitcoin investments and savings are substitutes. I think that the relationship isn't nearly as strong as you feel. Mostly people invest a much smaller amount than they save. But less deposits in turn could lead to banks needing to put up interest rates to encourage saving.

Just talked to a banker today on a similar topic. My questions were is our government looking to do something about Bitcoin being accepted or making it legal? Are earnings from Bitcoin legal to declare and share with the internal revenue service? Did someone actually filled any kind of form about revenue from any sort of crypto around? Please take note that I live in a country that is still pretty much functioning with 90s technology so all of this is big news to most of the people around. His answers were the following, our government is actually giving zero fucks for the time being about any sort of digital payments (we were promised to be listed on PayPal in 2012, 2018 - still nowhere near that). Talking with the IRS about this sort of earnings will usually depend from their current mood. They might tell you that you are OK with receiving funds from abroad or they might tell you you must pay 10% personal income tax on those or simply reply that it is illegal to "convert" any sorts of digital assets into money. People that earn online mostly use prepaid cards to avoid taxes or any sort of trouble that can surface in this hellhole. He was not much into it, but said that every sort of income from a bank that is abroad is welcomed in our country and can only do good to our economy. We'll probably see what happens in ~5 years from now when the world adopts crypto and we are one of the few countries to still work with fiat.

Bitcoin won't mess with the banks. Bitcoin is a big bubble & definitely not worth its current value.

Cryptocurrencies in general, however, definitely do have the potential to beat banks. I know a lot of people who are looking for places to put their money and gain a little interest, other than banks. Why? Even the best banks offer only about 0.1% interest, whilst the inflation is far higher than that. Cryptocurrencies stop that inflation and allow us to stop losing money from saving.

Another great feature of Cryptocurrencies is the fact that they are, or will be, ways to transact very quickly, without too high costs and anonymously. All 3 things beat banks, as Banks often:
-Charge fees
-Sometimes take days to transact
-Continuously watch where your money is coming from & going to

Bitcoin, however? Bitcoin is a failure. It was a test and a nice first version of a revolutionary technology, but it's not more than that. It won't have any significant effect on the Economy other than some losing a lot of money and some gaining a lot.

Bitcoin is nothing more than a simple redistribution of wealth.

First, i believe bitcoin users or crypto users are helping increase bank deposits. Crypto users will not entrust their big money in banks for fear of being questioned. If they have millions in hand i doubt they will put it in banks or banks will freeze their accounts and investigate the source of the said money and charge tax on it. I know some friends do not put their money in banks. In economy, i dont think it helps much but to some jobless individuals maybe.

In theory yeah it would effect how the economy functions but I don't think it will cause the economy to struggle. How much money in the world do you think can actually flow into bitcoin? I would imagine that maybe 25% flows into cryptos and bitcoin total and even then that is absolutely massive. Therefore I think the effect on economy will be minimal

It's a good question. Let's say a substantial portion of the value of dollars flows into cryptos. The theoretical impact on dollars will be a substantial depletion of remaining value, or inflation. Major inflation would result in central bank tightening to reduce liquidity and put downward pressure on the rate of inflation... see 1980s and Paul Volcker (Fed chair at the time).

BUT, since inflation in this case is not being caused by an overactive economy, the result would then be stagflation... the worst of both worlds. High inflation and low growth. Not pretty.

You guys are missing the point. Let's say hypothetically, in the future, tens or hundreds of millions of people withdraw their bank deposits and use it to purchase bitcoin, because they believe it to be safer/less prone to inflation. Yes, those dollars that are exchanged for bitcoin are going to go to to other people, but the VALUE of all that money will be less because of the USD/BTC exchange rate. So bank checking/savings deposits are reduced by billions of dollars. What effect is that going to have on the economy?

I think Bitcoin is redefining the centralized banking scheme by leveraging the power of blockchain thus slightly affecting  conventional bank deposits where it will be minimize.  As for the economy, It may have an impact especially for the unemployment rate in a certain country wherein the unemployed may have the chance to earn and profit through involvement of bitcoin. Also, Bitcoin may still affect the economy even if it does not turn to be a currency that many people utilize and empathize.

I don’t think the emergence of bitcoin would have a great impact on the economy since bitcoin and banks are different entities which targets different market as well. Maybe deposits would somehow be lessen due to investment in bitcoin but I think banks would still prevail on the depository agents that people have

Say cryptocurrencies take off and people hold more of their savings in crypto instead of bank deposits. Currently everyone's savings is in bank accounts which is being lent out to businesses and hence stimulating the economy. What is going to happen if bank deposits drastically decrease?

On the one hand, maybe it will not have much effect on the economy because since lending will become tighter, businesses will need to justify the loans more (vs. if there is easy access to money) and will create stronger proposals. On the other hand, could it have a detrimental effect on the economy?