Santander Admits That Bitcoin Might Become A Danger To Banks!

The Spanish financial group, Banco Santander S.A. has released a report created by two of their researchers, concerning the benefits of Bitcoin over credit cards and regular, traditional services offered by banks. The paper, in detail, explains the increasing risk of cryptocurrencies, which are becoming more popular, to become a more suitable option for people than traditional financial management.

A special meeting took place on August 23rd, where affiliates from Banco Santander, as well as Santander R&D officials from Latin America, met with the Mercado Bitcoin Brokerage to talk about the future of technology and finance. Bruno Mendonca and Henrique Navarro, the researchers, came to the conclusion that banks in Brazil could benefit from distributed ledger technology, even though it’s still in early stages. The researchers noted that banks all around the globe are actually investing their resources to research the distributed ledger protocols. The affiliates of Banco Santander agreed that the concept of blockchain and cryptocurrencies, like Bitcoin, will change the definition of money transactions in the world of banking.

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According to the report, traditional financiers and credit card services will be at disadvantage to suppliers and retailers who accept digital currencies. It offers explanation as to why Bitcoin has the possibility to outperform legacy services, stating:

Some advantages are the low (near zero) costs in a bitcoin transaction; both parties to the transaction do not need to know each other; payment is fast (on average it takes 10 minutes to process a transaction, as set by the Bitcoin algorithm currently in place); there is no need to provide personal data. The Bitcoin concept means a virtual cash transaction with anyone, anywhere, in any amount.

Santander has been interested in cryptocurrencies for a while and believes that banks should build their own blockchains. In June, Santander U.K. admitted that they have been testing their own distributed ledger application with their employees. The app was the first one created by a well-known legacy bank that used blockchain-based protocols for international payments.

The report has also shown that Bitcoin is changing finances for the better. The only concern that the bank has towards creating their own blockchain, as well as advising other legacy banks to do the same, is that it might be a bit too late now, with Bitcoin being seven years old and well-trusted by many users around the globe.

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