Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Banks Really Need to Change Their Business Model to Survive

Banks Really Need to Change Their Business Model to Survive

Branden Hampton looks into the current state of financial world; the challenges that banking is facing in the rise of cryptocurrencies, decentralized finance (DeFi), and how these technologies could completely remove the need for banks, and the people in them.

The issues plaguing the financial world―whether centralized finance, insurance, lending or other assets — all come back to human error. For instance, why can’t a dispensary put cash in a bank? Because of bad human judgment. These rules and regulations make zero practical sense.

The blockchain ecosystem takes the human element out of the equation. Now the technology governs because Satoshi Nakamoto was smart enough to realize that someone has to remove people from the decision process.

In decentralized finance, I don’t need approval from a bank if I want to borrow or lend money.

I just need to meet certain, automated criteria. There’s no prejudice. There’s no judgment against somebody because of age or some fictitious scoring system that can be gamed. It doesn’t matter what race, gender, or sexual persuasion you are. If you meet the criteria in DeFi, the transaction will be completed. If not, it won’t.

Satoshi was smart enough to see the need to remove people from the equation. Big banks will reject your account application upfront or wait for their compliance department to deny it, which then causes your money to be placed on hold, beginning a long process of getting out your money. People smartened up. They realized you need to take people out of the equation, because, generally, they make asinine decisions.

Decentralized finance is the future. Unless these banks make a lot of very big changes to their business model in short order, they won’t exist. Chase Bank. Bank of America. Wells Fargo. I don’t care how big they are. These banks won’t exist in ten years if they don’t fix the issues that are wrong that cryptocurrency fixes.

Decentralized finance will spur forth world-changing innovations. Why would I go put money in a bank and earn a tenth of a percent interest or a quarter of a percent interest when I could instead put a million dollars on deposit into a staking system or a yield farming system and earn up to 15%. There is no reason to place money into a bank so they can make 6% on mortgages and 8% on car loans off your money, where nobody benefits besides the bank itself.

That’s the biggest thing that’s going to change over the next few years: you’ll see fewer people putting their money in banks and instead into these decentralized finance ecosystems.

They’ll smarten up and say, I’m going to not only put this on deposit and earn money, but I’m going to borrow money against this DeFi platform in lending, and instead of paying capital gains taxes on my profits, because I had a taxable event by selling, I’m never going to sell.

I’m going to borrow against my stash and pay a small amount of interest, which is probably going to be beaten by my appreciation in my staking earnings. So you’ll be able to borrow money against these without paying taxes.

It eliminates almost all of the traditional finance concerns that people have, which is putting money in the bank and not getting a return and then having to pay these enormous tax bills when they make a profitable investment.

Source: Banks Really Need to Change Their Business Model to Survive – Fintechs.fi

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Druzhba Pipeline Incident Sparks Geopolitical Tensions
Cost of Opposition Leader Péter Magyar's Economic Plan Revealed
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
Budapest Central European Fashion Week Kicks Off
U.S. Celebrates Labor Day
Hungarian National Team Captain Scores Epic Goal
×