Initially, centralized banks refused to acknowledge virtual currencies, leave alone accepting them as a mode of payment. But things have changed with the growing popularity of the Blockchain technology (which initially had a few limitations) over the years and the way Ethereum has improvised the building blocks, thus creating what we now know as a decentralized platform that ensures safe and secure payment (with end-to-end encryption, hiding all your transaction history from the public eye). Banks soon realized that they could adopt this open ledger to process faster and affordable transactions without engendering security breaches of crucial data. No sooner than the launch of Ethereum was announced in 2015, Barclays and UBS, the two renowned financial institutions decided to experiment with its Blockchain features. Many followed their footsteps. One of the major reasons why banks opt for Ethereum is its smart contract feature. Since these electronic agreements are indestructible and stand against the onslaught of time, these avert disputes of any kind.
The traditional banks in different states work on currencies minted by the respective governments. In federal banks, the reserve currency is the conventional US dollar which may be printed as and when required. The exchange rates and the value of money is dependent on the central governing bodies of the state. A certain amount is available for each customer on a daily basis as there’s a fixed limit for every transaction made. If all the customers were to withdraw money all at once, the banks would declare themselves as bankrupt. Here are a few disadvantages of traditional banking, the reason why Ethereum has found an upper hand:
The reasons why Ethereum has been adopted by several banks need no real mention. The advantages are many, some of which are listed below:
