Last updated on January 2nd, 2018 at 12:00 am
The bank Credit Suisse has joined the wave of financial institutions investigating the benefits of Bitcoin. Like the Bank of England and Goldman Sachs, the major Switzerland-based holding company that operates the Credit Suisse Bank and other financial services has published an article titled “Bitcoins – Money Without Physical Form”.
And much like its counterparts spread across the world, the article released by Credit Suisse concludes that Bitcoin can have a positive impact in the traditional financial system, which should integrate cryptocurrency.
Besides presenting Bitcoin, the report analyzes the pros and cons of the world’s most famous digital coin when used as a security and as a currency.
“Bitcoins have a future in certain areas and countries,” the document says, adding that “when combined with the traditional financial system, Bitcoins could have cost advantages over credit cards or providers such as Western Union when used as a transaction system.”
“In countries such as Argentina and Zimbabwe, where confidence in the country’s own currency retaining its value is very low, Bitcoins are an alternative that is being used with increasing success.”
However, the bank’s analyst in charge of the article doesn’t think Bitcoin will be able to disrupt the money monopoly operated by the central banks. “The outlook is not good,” says the author, pointing out that the problem is decentralization, simultaneously Bitcoin’s greater advantage and “biggest drawback”.
“A currency is only worth what you believe you will be able to purchase with it tomorrow. If this confidence is removed, the value of the currency can decline rapidly, which is what happened with Bitcoins at the beginning of 2014. The opposite is also harmful: The increase in value Bitcoins experienced in 2013 would have corresponded to an economically crippling deflation if they had been the general means of payment. These fluctuations in value are what is stopping bitcoins from becoming more widespread as a means of payment,” the report explains.
However, the report’s overall conclusion is that Bitcoin has the potential to change the traditional financial system if both were to be combined. This type of integration is reportedly part of IBM’s latest project, according to information revealed by an anonymous source close to the company.