Topic: Is there any real use for bank-backed cryptocurrency ? - page 2. (Read 564 times)

Ripple (XRP) is one of the Altcoin that is supported by the central bank, and I don't remember which country it belongs to, but you can find more information about it on the Internet. Also with some projects like Traxion also received support from banks from the Philippines.

The bank follows in the footsteps of several small players who have introduced similar digital coins tied to the dollar. A consortium of European banks has completed a similar product, Utility Settlement Coin, which allows faster bank transfers. Some crypto currency exchanges already have what is called stablecoin.

Banks can put their operations on blockchain but that would be a private blockchain! They will never run a public ledger because if they did, no one will like to open accounts there. I mean why would you want everyone to know what your bank balance is?

The concept that was invented by the inventor, Satoshi Nakamoto, that Bitcoin offers complete ownership without the need for ties with third parties both from the private sector and the government, is the main attraction for its users. The potential benefits that banks can use in connection with digital money may not be directly related to cryptocurrency (Bitcoin, Litecoion, Dash, etc.) itself. The advantage that may be utilized by banks is the system that runs the crypto currency itself, namely Blockchain.

If the bank is reliable, big and legit, uses would be:

1. The bank-backed cryptocurrency would be considered legal.
2. Like shares, the cryptocurrency would either have a stable value or be volatile.
3. It would be similar to reward points that banks offer which may/may not be redeemable on other websites except for the banks own website.
4. If approved by Reserve Banks, it would be popular like PayPal.

I think you do not have to find more functions for cryptocurrencies because, even at its current state, there are so many uses that people in the market can do with it from investing, trading and storage to name a few, which all have the capacity to yield good returns. So , as for the function aspect, I donp not think we need a new use. However, I think the critical difference lies on the trust factor that people might give to a bank-backed coin. Since banks are usually trusted by the community, any product it carries can have that chance of having that same trust spread through them.

I don't think there is a reason for them to make their own.

I mean, if they will be making one, what will be its purpose right? Instead of making their own coin or cryptocurrency, I guess they will just develop the technology they have. Some say that they might make a technology that is based on the technology of Bitcoin right now which is the Blockchain. Also, if they will be having a coin, I don't think it will be decentralized.

This could be interesting. Tether is basically the Fiat onboarding method for most Bitcoin exchanges from Bitfinex to Bittrex. If banks were to provide such a backed crypto, it'd be equivalent to providing a fiat onboarding service to Bitcoin. It can be their way to bring customers into the crypto fold by saying things like "Our safe and secure ramp to the world of cryptocurrencies gives you complete peace of mind".

This means the banks holding crypto in the name of their customers and may give a spur to custodial services being touted by Coinbase etc. The problem with such a scenario is that banks wouldn't ever want to endorse to cryptocurrencies in this way. They may play the Divide and Rule card by allowing the more centralized currencies into their fold while keeping away from BTC.

if it is for investment, as in people investing in a token that a bank creates then I don't think it is that likely to happen. maybe big guys like Warren Buffet may invest in such things but regular investors would never go for it.
but if it is for usage, then yeah why not! people are already using banks so why not use other crap that is created by them. it is like opening up another account or even as simple as upgrading your account to enable you to use that useless token of theirs!
I don't see any future for something like that when decentralized bitcoin exists though.

no there is none.

it is simply because of the fact that when people use banks and any other centralized service like Paypal,... they don't care about what type of technology they use. all they care about is for their money to be safe in the hands of that centralized party and them being liable in case something happened like them getting robbed,...
they don't care about cryptocurrency that is created by the bank.

when we talk about cryptocurrency and it becomes meaningful is when we add decentralization to it.

I do not think that banks developing its iwn Cryptocurrency is a bad thing.
I see it as a gift development that could accelerate mainstream adoption.
I see it as a plus to cryptosphere.
The only constant thing is change.

yes, like jp morgan, one of them is launching its own crypto even though the observer says it is not related to the crypto character itself.
but anything will be developed with a variety of innovative ideas, because I think this is part of evolution and revolution

But if they can integrate or works together with bitcoin, then I think it will give them the power to solve the financial problem in their country. But so far, I don't see a reason for the bank backed cryptocurrency to stay with us because we already have our own banks in our wallet. We can manage our coins without having the banks because we are the banks for our own coins. Maybe in the future, when all future technology has invented, we can manage our finances without saving in the banks anymore.

In my opinion, even though decentralized currencies are supported by banks, they cannot guarantee their security because they adopt the concept of decentralization.
A currency that is supported by the bank, maybe there will be a lot of interest because of the price stability

If banks a looking to make there own crypto currncy and want to bitcoin to fall down it would be bad idea for them. Since they'll surly make a stable coin which can be controlled by government. But it won't defeat the bitcoin since its a decentralized which can increase where the bank currency can stable for a years

That was created for a purpose, and therefore I believe it has a used.

The crypto world is so big but it will be dominated by a decentralized currency as it was the idea why bitcoin is created.
However, we cannot avoid those bankers who also like to use the blockchain system, they build their own token and that makes this market grow.
Centralized and decentralized, we are in one market now, and we will be bigger that we serve people with different interest.

Think of fiat, why do we use those? Coz they are backed by something strong enough to enforce its value, aka the government. Bankcoins are likely gonna be government-recognized and maybe even insured.

I don't think anyone can just stop banks from trying this. Once it becomes commonplace I can see the government joining in and digitizing their fiats.

no one says that ripple is a non trusted coin some but some says that ripple was a bad coin , some says ripple was not a real crypto  . anyway what the op only ask is what are the real use of crypto that is backed by banks  . ripple for example , i dont really know if what if its real purpose on why it is built but i see that ripple is still on the top 3 list  ,  so i guess ripple is only good for investment purposes and for a currency use as well due to its low fees and faster transacting time  .

Its not useful but people don't understand the benefits of decentralization, and the risks of centralization. But everyone is giving a try at their own crypto, Governments as well. Not that i would recommend them... In the past it used to be fashionable for companies to issue their own credit cards, so i expect them to start issuing their own cryptos as well, just because they can.

But in the end most altcoins won't survive.

Yep, I think that's possibly their niche - creating a kind of "TetherUSD" backed by an entity thought by many people to be "trustable" (above all those that aren't in the "crypto scene"). Such a "coin" may be even give them profit for a very low cost if they realize it via a private blockchain where you haven't to care about attacks.

However, private blockchains are, in reality, simply private company-owned databases with a special "securing algorithm". There may be simpler and more efficient ways to secure a financial database than to run a whole blockchain. So I guess for banks, if they really want to sell a product that makes sense, could go for the "consortium blockchain" model (similar to Ripple): centralized but publicly viewable/checkable. The other interesting technology for banks could be to use a coloured coin on a strong blockchain (like Tether), which would be even cheaper, although they would have to pay transaction fees. I think only Bitcoin provides currently the security needed for that purpose (if someone created "Bank coins" out of thin air double-spending them, the entity owning the coin would get a lot of trouble).

I think it's the other way around: they may choose a cryptocurrency because they want to be compatible with other cryptocurrencies and their services. For example, imagine a "BankUSD" (in the spirit of Tether) which can be traded to Bitcoin via Atomic Swaps. That would be a serious rival for traditional Bitcoin exchanges.