Cryptocurrencies are a global threat to banks

After a few years States all around the world have started  accepting cryptocurrencies. Economists at the Federal reserve Bank of Philadelphia believe that the formation of sovereign cryptocurrencies under the authority of Central banks turns to be a threat to the entire banking system. Thus, the function of a commercial Bank as an intermediary will be eliminated.

If the Central Bank creates centralized cryptocurrencies, it will become not just arbitrators and regulators, but the real players within the field. The need for an intermediary to distribute financial flows will vanish, since the digital currency will immediately be issued to the account of an individual or legal entity in a reliable blockchain system that is protected from fraud.

Also, given the current trends with negative interest rates, a potential investor may refuse  to invest money in a Bank if there is a reliable alternative.

According to researchers from NBER and the Reserve Bank of Philadelphia, this will lead to fatal consequences for banks.