Rather than mistaking the term ‘banking’ for an institution, think of it as a process. Crypto banking is the process by which cryptocurrencies can flow into the market and can be exchanged to facilitate transactions of all kinds. Crypto banks are platforms such as cryptocurrency apps that allow cryptocurrency holders to store their crypto assets, as well as use them to make everyday payments.
Crypto exchanges serve as a pseudo or rather as a new kind of bank for crypto, an effective alternative banking system for the people’s money. Another crucial part of crypto banking is crypto wallets are a crucial part of crypto banking, as banking consists of other things like lending, storing, and borrowing.
Well, suppose person A needs to transact with person B for something he has purchased. In that case, person A would go to his trusted crypto applications such as XTRM and would pay directly from the crypto wallet, where the money is saved. Now, there are two types of Crypto Wallets – Custodial and Non-custodial wallets. Generally, people go with non-custodial wallets as they give more autonomy to the crypto users.
Now, how this process works is that when person A would initiate a payment, he would have to enter a private key, which he received at the time of registration, as in PIN in traditional banking terms, which does not happen with the custodial wallets. This way, there was no third-party or intermediary involved in the process and transactions can take place anytime without high interest.
Whereas, if person A wanted to receive a payment in cryptocurrency, he would share his public key, as in Account number in the traditional sense. So, this was an example of simple transactions taking place. Let’s look at other activities involved in the crypto banking process.
The process of lending and borrowing has also gone decentralized. There is no need to break a sweat in requesting the traditional banks to provide you a loan. Since the users already have cryptocurrency, they can lend it to or even borrow more if need be, from anyone on the platform by using collaterals such as security bonds, property, and all other things that are usually accepted by banks.
Advantage with XTRM here is there is no third person involved. There is a direct line of communication between the borrower and the lender. To make this whole volatile and speculative process secure, smart contracts are used. These contracts state the terms of the transaction and work as documented proof. These contracts protect the interest of all parties concerned for they cannot be tampered with.
With the exponential popularity of cryptocurrencies, many blockchain development companies sprouted over the years, to facilitate the overall exchange process. From the myriad of these companies, the most popular cryptocurrency wallet apps and P2P lending apps available in the market is:
XTRM – It is a wallet that supports Bitcoin/Ether/Litecoin/Ripple/XTRM. It has a very friendly UI and possesses amazing remote-disable phone feature in case the device gets stolen. It allows users to sell, buy, and spend Bitcoin. Users can also manage accounts while sending and requesting Bitcoins from other users. It is considered to be a trusted platform for crypto banking.
It is a fully decentralized mobile app that enables its users to store and manage tokens and coins while being in control of their private keys. The reason it is so popular among crypto users is that it supports multiple cryptocurrencies such as Ethereum, Bitcoin, Litecoin, Ripple, XTRM.
Labeled as the world’s most “technology-ready” nation, Singapore has evidently integrated cryptocurrency into its economy. All the crypto transactions are subject to GST and commission fees. However, capital gains taxes do not refer to the long-term investments into the Bitcoin.
Being the biggest trader of the Bitcoins globally, Japan has accepted cryptocurrencies is its daily operations and transactions to a great extent in comparison to many countries. It has also announced digital currency as the legal tender of the country.
It is one of the few countries that have welcomed the concept of cryptocurrency with open arms. Here, Cryptos earned as salary and mining profits are subject to income tax, including self-employed individuals. All in all, Switzerland is unofficially a cryptocurrency tax haven, according to many.
There are many other countries that are slowly treading on the path towards decentralized financing by embracing cryptocurrencies.
Though Decentralized Financing (DeFi) which is a part of crypto banking has been bagging praises and attention from many.