Why big institutions prefer Bitcoin transactions instead of traditional Banking?

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Avatar for Samghai
3 years ago

That is a very good question !! So, there are various reasons why big institutions do prefer transacting in crypto than using banks. 1) The cost incurred in transferring millions of dollars takes a lot of time and money. The transaction fees that are taken by banks are huge and also, the time taken for a traditional banking system to transfer this amount of money is way more even if comparing it with the Bitcoin Blockchain. The banks can take weeks to get these abounts verified and transfer. 2) These transactions are not secured if performed via Banks. Even if they used the greatest algorithms, they are still less secure than Blockchain (hands-down). 3) The money can be traced when you do a banking transaction. But, when you do transactions using crypto, everything is anonymous yet completely transparent. This helps companies to carry out some secret tasks which they don't want the public to be known about. Maybe related to a big announcement related to their product. 4) Since, these huge companies are MNC's which means they have offices internationally and if they want to transfer money from example India to America, they need to convert the INR(rupees) to USD(dollar) while converting and there are various banks involved and many ledgers. But, when using crypto, there is just one currency and one ledger. You can perform transactions from sitting from any part of the world. 5) The use of exchanges depends from company to company. Some use these funds to fund for some other projects and keep them in their wallets. Some, need these funds in fiat currency. There is not always a need for exchanges in order to get these converted. Many also perform local transactions, where they send these cryptos who need it and in exchange, they get dollars in their bank acc. 6) Talking about volatility, if a company wants cryptos only for the purpose of investment, they go for Bitcoin or other Altcoins, but if they want to transfer for the sole objective of exchange of assets, they prefer stable coins, whose value depends either upon Gold or USD.

This is the best answer ever from Yash!

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3 years ago

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