Read a report that crypto banks will swallow fiat banks within a few years. Interesting because, ground reality is quite different. Let us for a moment define two temporary terms for our discussion, ‘pure crypto banks’ that offer no fiat services and restrict, their operation to cryptocurrency. And then we will define ‘pure fiat banks’ as banks that offer pure fiat currency service – no connection to crypto currency.
It is no secret that fiat currency is here to stay, it is not going anywhere in the near future. At the same time there is little doubt that, interest in cryptocurrency is increasing at a rapid rate. We have come to a point where many people understand what, crypto payments mean – this irrespective of whether they currently use it or not. Crypto payment implies using cryptocurrency to pay for products or services, this instead of using credit cards, cash or bank payment options.
Most crypto players would be making transactions that involve fiat currency. There would undoubtedly be a group of clients from conventional banks that, deal in cryptocurrency. So applying the ‘pure’ bank concept that we just defined at the start of this report, most clients would need to operate an account in both these banks.
The idea that crypto banks would swallow fiat banks or vice versa is baseless. We will see crypto banks striving to provide fiat currency services and at the same time, fiat banks would seek permission to offer crypto related services. This is in fact happening right now - Kraken a regular crypto exchange in the US, has been granted a banking license. Very likely that large crypto exchanges would join the bandwagon. And the cases where banks are seeking permission to offer crypto services, are many.
In our opinion, we are heading for a host of mergers and partnerships. As competition heats up, neither crypto banks nor fiat banks, would want to reinvent the wheel. They are more likely to enter into tie-ups, the larger ones might just do outright acquisitions. Both crypto and fiat banks that, refuse to see the writing on the wall and make changes – will ultimately have no space of their own. This is really inevitable in any industry where, change comes fast and in big strides.
Let’s summarize this brief report by revisiting the two concepts that, we coined at the very start – pure crypto bank and pure fiat bank. What we are very likely to see is a partial morph, of fiat and crypto banks. Casualties will be seen in both cases when, banks refuse to innovate and adapt.
GLITZKOIN: A quick recap of the Glitzkoin project and the GTN crypto token. The project was launched to improve the demand for natural diamonds and to enhance, the efficiency and productivity of the multibillion dollar industry.
The DiaEx diamond trading platform was developed using Stellar blockchain resources. The GTN token was launched as part of the project and is designated, as the mode of payment on DiaEx. Promoted by second generation diamond veteran Navneet Goenka, Glitzkoin assigned a multifaceted role to the GTN token.
The trading platform was completed in 2019 and was put through rigorous testing in early 2020. A team of diamond dealers subsequently did a pilot run on DiaEx with, actual transactions made on the platform. This process was largely successful and revealed a few areas for improvement. The Glitzkoin tech team was handling the minor adjustment when, the pandemic and subsequent lockdowns slowed down the process. The management will reschedule the full launch of DiaEx once the health crisis eases.
Talking about the multifaceted nature of the GTN token, the project is also focused on further increasing usage for the crypto – this aside from crypto exchange trade and the payment usage on the DiaEx platform. The concept is to have operators of various businesses, accept the GTN token as a mode of payment in their operations. Moving this idea forward Glitzkoin has confirmed a partnership with online ticketing giant Myticket.asia, wherein clients of the ticketing portal could use the GTN token as a mode of payment. Technical requirements for the integration of systems on both sides is at an advanced stage, nearing completion. Reviewing the challenges that the entertainment industry has been going through during the COVID pandemic, both managements have decided to set a launch schedule when the situation starts to normalize. The arrangement setup between Glitzkoin and Myticket.asia will form the blueprint, for similar deals to be negotiated with other business operators.
Related Resources: [Project Updates]