The traditional financial world is in trouble as banks in the US and Europe have begun to fail. Governments and central banks are implementing measures that will have an impact on rising inflation. This is not the first time we have seen a similar scenario. Similar events have been repeated over and over again. Bitcoin was created in response to the 2008 crisis. A decade later, we have other blockchain projects like Cardano, which can replace the banking system in another 5 to 10 years. They say that cryptocurrencies are to blame for the current financial problems. How is that possible? It must be said emphatically that the current problems have other reasons. They are the fractional reserve system, endless money printing, bailing out failing banks, poor risk management, corruption, and other things. The blockchain industry is the solution to many of the current problems of banks.
TLDR
- Bankers benefit from the fractional reserve system, but depositors bear the risks.
- Bearing the risk should mean accepting the loss if expectations are not met. If we do not keep this rule, it will lead to a loss of trust in the system.
- The “fix the money, fix the world” narrative is partly false. Fixing the financial system requires changing the rules.
- Cardano will allow us to create money with stable purchasing power backed by digital assets.
- Cardano will allow us to create a bank whose services will always be 100% backed by its own capital. The bank would be transparent and profits would be shared fairly with depositors.
This article was prepared by Cardanians with support from Cexplorer.
Read the article: https://cexplorer.io/article/cardano-can-replace-failing-banks