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"Anyone can become a bank" isn't a good thing. What stops people at the moment is the requirement to be regulated. Compliance with that regulation costs money a
by tikkabhuna 9y ago
"Anyone can become a bank" isn't a good thing. What stops people at the moment is the requirement to be regulated. Compliance with that regulation costs money and is a barrier to entry but a necessary one.
Your "only downside" is enormous! I'd never consider paying my salary or keeping my savings in an organisation that has no regulation. My money could just disappear overnight.
You add that I could put 1% of the account into insurance, but that is essentially a 1% (yearly?) cost. Why would I do that when I can have a GBP bank account regulated by the FCA for free? In fact, the FSCS guarantees up to £85,000 per banking group (eg. HSBC).
- Mandatum 9y agoThat was just an example, it may be larger - it may be smaller depending on the amount you hold. I assume it'd be less than current fees you pay to hold accounts, make transactions, margins paid in FX. I'm thinking aloud, and I totally get the "why would I do that when I can use something that's existing and trusted".. But think about the early days of banking. We've seen entire banks collapse and people lose their money in the past decade alone. The early days of banking was rife with fraud and scams. I don't expect this to change in the short-term, however think about the convenience you'd see on day-to-day banking and how fast new features could be developed compared with our current banking system. Even if you only held a very small amount in a "new bank" and "currency" and kept you significant savings and assets in a traditional bank, I could see this slowly chipping away at existing banking services very quickly once a consensus on currency is reached within a community.