Say cryptocurrencies take off and people hold more of their savings in crypto instead of bank deposits. Currently everyone's savings is in bank accounts which is being lent out to businesses and hence stimulating the economy. What is going to happen if bank deposits drastically decrease?
On the one hand, maybe it will not have much effect on the economy because since lending will become tighter, businesses will need to justify the loans more (vs. if there is easy access to money) and will create stronger proposals. On the other hand, could it have a detrimental effect on the economy?
The deposits in banks maybe lesser due to more investors are coming to crypto market everyday.But still people don't have good trust on bitcoin or other crtptos so it doesn't affect on big scale for now.But in future the crypto currency investments leads to shut down of many banks due to insufficient deposits or investments on fiat.So banks are trying to create their own cryptos for securing their future.