Cryptocurrency And Banking: How We Are Progressing
Cryptocurrency is a certain threat to banking. In fact, we have done a good job building out the infrastructure to compete with the depository banks.
In this video I discuss where the two industries stand and how far the gap is. With depository banks, we are there. What is next up, and a far bigger challenge, is the investment banks.
▶️ 3Speak
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Summary:
In this video, the speaker delves into the world of cryptocurrency and the banking system. He discusses how the banking system operates with its intricate language and terms, contrasting it with the budding cryptocurrency infrastructure. He emphasizes the threat cryptocurrency and blockchain pose to the traditional banking system and explains the slow but eventual transition towards decentralized systems. The speaker touches on the significance of understanding this transition, the role of different types of banks, and the potential power of decentralized finance (defi) in reshaping the investment banking realm.
Detailed Article:
The video opens with a discussion on the complexity of the banking system's language, highlighting the importance of understanding the terms and acronyms associated with commercial and investment banking. The speaker mentions compiling a Bank Glossary for Leo Glossary, indicating a deep dive into banking concepts. He draws parallels between the specialized language in various fields like law and medicine to the banking sector, emphasizing the need for comprehension to navigate the system effectively.
Moving on, the speaker delves into the intersection of cryptocurrency and the banking system, pointing out how blockchain and the entire decentralized infrastructure pose a significant threat to traditional banking. Despite acknowledging the current minuscule size of cryptocurrency infrastructure compared to traditional banking systems, he stresses the inevitability of transitioning towards a decentralized framework.
The focus shifts towards the gradual building of infrastructure, the importance of decentralized platforms, and the evolution of protocols that would enable the growth of synthetic assets and securities trading on decentralized exchanges (DEXs). The speaker highlights the lack of defense mechanisms in the banking system against the rising tide of decentralized finance, pointing out the existing barriers and advantages the traditional system holds through regulations and political influence.
As the discussion progresses, the speaker addresses the role of different types of banks, categorizing depository banking as a smaller player compared to the wholesale and investment banking sectors dominated by giants like Goldman Sachs and Citigroup. He talks about the progress made in setting up the depository arena with cryptocurrency wallets, Ethereum, Bitcoin, stablecoins, and other digital assets, marking it as a foundational step in the transition towards decentralized finance.
The speaker prompts contemplation on the potential power of defi, liquidity pools, decentralized exchanges, and derivatives in reshaping the investment banking realm. By contrasting the created derivatives in Wall Street with the future possibilities in decentralized finance, he underscores the transformative impact of widespread online access to financial tools. The video concludes with a forward-looking perspective on the exponential growth possibilities of cryptocurrency, NFTs, DAOs, and other yet-to-be-discovered innovations, envisioning a future where the cryptocurrency market could reach quadrillion-dollar scales.
In essence, the video provides a thought-provoking analysis of the evolving relationship between cryptocurrency and the banking system, highlighting the disruptive potential of decentralized finance in reshaping the financial landscape. It underscores the importance of understanding the transition towards decentralized systems and the vast opportunities it could unlock in the world of finance.