How is the Banking Sector of Canada Affected by Bitcoin?
With the growing number of financial frauds, digital currencies have entered the system. Bitcoin is among the leading digital currencies, and it is taking over a large section of the population to invest their money in bitcoins. Today you will see the effects of Bitcoin on the banking sector of Canada. Here you can check how Bitcoin affects Central Banks
5 Ways how bitcoin affects the banking sector of Canada
- Bitcoin is taking over the real currency
Although bitcoin is not recognized as a real currency certainly, it has made an entry into the market and challenged the value of the Canadian dollar.
It has become essential for banks to look forward to it because people are more inclined towards bitcoins rather than spending their money on traditional currencies.
According to Financial Post, the volume of daily bitcoin transactions is more than $60 million. This is increasing day by day, which shows that people are now offering their trust over bitcoins.
- The bank’s financial reporting will be unaffected.
According to recent surveys, it has been found that consumers are still not shifting towards digital currencies, and investors who already own bitcoin do not want to sell it off.
It has made a significant impact on the banking sector of Canada as more and more people, who already have bitcoin wallets, are looking forward to an opportunity to invest their money in bitcoins.
According to Bank Of Montreal David Cole, Bitcoin’s balance sheets will not be affected by bitcoin because this is merely a peer-to-peer payment system.
- No bitcoin transactions in Canada
Although there are chances for bitcoins to become famous and affect the banks of Canada, it is unlikely because there are no bitcoin transactions in the country, according to the Bank Of Canada.
The bank does not provide such services, so customers cannot use their bitcoins to invest money or keep their savings. There are instances where few companies have started accepting bitcoins as a mode of payment, but the number is still less compared to other countries.
- Different types of risks associated with bitcoins
The status of bitcoin in Canada is still under question because some risk is involved, affecting the economy and might be dangerous for the users.
The government does not regulate Bitcoins, which means no security for the customers. According to Financial Post, bitcoins can be robbed easily, and there is no way to track such transactions because it works on a peer-to-peer payment system.
- People use bitcoin for money laundering
Although bitcoins were started as a decentralized payment method, some reports suggest that people use bitcoins for money laundering purposes.
There is no way to track such transactions, which means that criminals can easily invest their black money in it. According to an estimate, about $90 million worth of illegal activities had been done through bitcoin by the end of 2015.
3 Negatives of bitcoin that affects the Canadian banking sector
- No customer support
The main problem with bitcoins is that there are no customer support services available which means that if you lose your bitcoins for whatever reason, they cannot be replaced.
There are no numbers to contact, and calling them will not help because they neither provide any email address nor put up their phone number on their website. This is one of the significant problems associated with bitcoins because customers are not aware of recovering them or getting help.
- Banks are reluctant towards bitcoins
Even though banks have several opportunities to benefit from bitcoin, they have reluctant to accept them. Rather than focusing on the advancements made by bitcoin, many banks look forward to its weaknesses and want to stay away from it.
- Threat for retail banking
The use of bitcoins can prove to be a threat for the retail banking industry of Canada as there are chances that people might shift towards bitcoin currency in the future, which will affect them financially.
Conclusion
Although there are few concerns for bitcoins, they can still prove beneficial for Canada’s economy and banking sector. But before you invest your money in bitcoin, make sure that you have enough information about this currency to avoid losing your hard-earned money.
