It will be like a typical bank now if bitcoin is centralized. That again can face the problems encountered in banks, longer transaction time and much vulnerable to hacking.
The bitcoins blockchain solves all of that. The system is very powerful to prevent hacking since there are lots of nodes should be attacked at once in order to do it.

This tread gave me an idea what if a fiat currency is used in the blockchain instead of issuing token and such. It is decentralized, fast and secure. The problem though since it is fiat currency its price isn't very volatile and subjected to inflation.