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December 4th, The International Day of Banks

UN announces Dec. 4 International Day of Banks

On 19 December 2019, the UN General Assembly adopted a resolution to designate 4 December as the International Day of Banks. 

According to xinhuanet, the resolution underlined the relevance of inclusion in the international financial system at all levels and the importance of considering financial inclusion as a policy objective in financial regulation, in accordance with national legislation.

According to the resolution, the UNGA also recognizes at the national level, the fundamental role of banking systems in contributing to the improvement of the standard of living.

As reported by e-zigurat, eleven years ago, Bitcoin changed the world, becoming the first cryptocurrency to permit secure and cheap peer-to-peer transactions without intermediaries. Throughout the years, blockchain has become known as the technology that brought us Bitcoin and is often still associated largely with the crypto universe, despite its other qualities. 

The main difference between traditional fiat money (euros, dollars, pounds, etc.) and crypto (bitcoin, Ether, etc.) would be that crypto is a decentralized and global digital currency and outside the control of the banks and not backed by a central government. Therefore, cryptocurrency is immune to the old ways of government control and interference.

Otherwise, there is no basic difference and both fiat currency and cryptocurrency can be called money or currency. Cryptocurrency, as well as fiat currency, can be used to purchase goods and services. Both have their value governed by supply, demand, work and other economic factors. 

On the other hand, the financial freedom and independence that cryptocurrencies bring to the table are very beneficial to businesses and individuals operating in regions wherein government entities control banks and financial institutions.

We could also mention that using and trading crypto rises the financial awareness of the consumers as they and only they have access to the funds and full control over them. 

Now it’s time to adopt cryptocurrencies. According to bcg, some financial services leaders remain skeptical of the value that cryptocurrency has as an asset class, and individual cryptocurrencies have lost market capitalization at times (including this year). During the COVID-19 crisis, cryptocurrencies have experienced volatility, and their reputation has been tarnished by the association of Bitcoin, the most well_known cryptocurrency, with criminal acts such as the Twitter hack of July 2020. 

Nevertheless, cryptocurrencies are a vehicle with great prospects. They have the potential to outperform conventional banking products while offering better efficiency, less bureaucracy, and more transparency.

the fact that cryptocurrencies exist outside the banking system and its regulations has resulted in many users considering it the more convenient way of doing transactions.  The fundamental reasons that people prefer crypto transactions over traditional bank transfers are the costs are lower and there is no need for a middleman.

Cryptocurrencies and related blockchain technologies are regulated by a wide variety of government organizations all over the world, each of which has introduced its own laws and guidelines. Countries hold a broad spectrum of views. Some are highly restrictive, banning or severely regulating both cryptocurrency exchanges and ICOs.

Even if the near future doesn’t hold promises of merged banking and crypto systems, it is clear that while cryptocurrencies have to adapt to the new rules and regulations, the banks have to learn to play the new game. Some of the more traditional operational methods need to be ditched and as an institution, they have to adopt a more fluid role. Maybe using blockchain technology in conducting their present business would help the banks to keep up and modernize their operational models.

Despite all this activity, many banking leaders are still uncertain about how best to use these currencies, how to avoid the challenges associated with them and how to manage transactions into and out of fiat currency. Luckily, banks still have time to differentiate themselves in this domain. Financial institutions that educate themselves now, and introduce well-designed offerings, will be in a good position to lead the industry in their regions or even worldwide.

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