The invention of cryptocurrencies (specifically Bitcoin at least) is not to replace banks, but to replace the way transactions happens. A normal bank transfer involves contracts and processes to make sure everyone that handles the transaction is honest. You basically put your trust on contracts that the transaction will actually go through. Bitcoin replaces this need of trust in the contracts with need of trust in the protocol that can be inspected easier than contracts that are most often private, at least that's the thinking.
> wouldn't you think the banks would be lobbying to have it banned?
There are plenty of examples where the banks in a country no longer accepts transactions from/to cryptocurrency exchanges, Sweden being one example where it's basically impossible to deposit/withdraw SEK/EUR to your bank if they think it has anything to do with cryptocurrencies.
In a ideal world, cryptocurrencies are as protected as normal currencies, and the need for banks are still there as not everyone will run their own node and have custody over their own wallet. Banks adds extra security, something some people want.
Problem becomes when you start thinking that one solution applies for everyone. Cryptocurrencies, just like normal currencies, doesn't work for everyone. People should be free to choose, without being banned left and right for arbitrary reasons. Try getting through banks fraud departments when you make transactions from/to countries like Nigeria, and you'll know what I'm talking about.
> The invention of cryptocurrencies (specifically Bitcoin at least) is not to replace banks, but to replace the way transactions happens.
This is a wonderful hypothetical in much the same way as spherical cows, but in the real world today, crypto is treated as a (quite volatile) speculative asset, not a way to transact everyday business. The world does desperately need fast payment processing that doesn't involve companies like Visa or MasterCard skimming off the top every time to enrich themselves and dictating one-sided terms to others (hello, OnlyFans), but I'm not seeing any evidence that crypto is poised to handle that. It's too risky. And the compatibility layer with legacy currency is too unwieldy: Every time you convert to regular currency you generate a taxable event, which is fine if you treat crypto as akin to a stock, but it'll make tax time hell if you're buying groceries and lattes and gas with it. It's not impossible to pass laws to make the best-case for crypto happen, but that would require a lot of political will that I just don't see happening; too many people benefit from the current system.
If there's a cryptocurrency that solves those problems, please let me know, I'd be interested to hear about it. But the current players all just seem like speculative bubbles for wealthy techbros to play around with. Many of which are driving electricity consumption for mining, which has, shall we say, some environmental downsides.
The restrictions on crypto are coming from regulators, not the banks, and the reason regulators aren't happy is due to the volume of criminal transactions, tax avoidance and scams enabled by crypto.
The reason the banks don't care is because at both ends of most crypto transactions you will find, er, a bank account. Crypto is only useful to the extent that it has real currency value, those Nigerian scammers and many others using crypto for transfers are just using cyrpto as an intermediate step to avoid pesky laws. That's fine as far as the banks are concerned because that's more money flowing into their systems.
> wouldn't you think the banks would be lobbying to have it banned?
There are plenty of examples where the banks in a country no longer accepts transactions from/to cryptocurrency exchanges, Sweden being one example where it's basically impossible to deposit/withdraw SEK/EUR to your bank if they think it has anything to do with cryptocurrencies.
In a ideal world, cryptocurrencies are as protected as normal currencies, and the need for banks are still there as not everyone will run their own node and have custody over their own wallet. Banks adds extra security, something some people want.
Problem becomes when you start thinking that one solution applies for everyone. Cryptocurrencies, just like normal currencies, doesn't work for everyone. People should be free to choose, without being banned left and right for arbitrary reasons. Try getting through banks fraud departments when you make transactions from/to countries like Nigeria, and you'll know what I'm talking about.