I don’t understand how or why any digital currency is converted to bank currency. I thought the entire point of crypto was to operate autonomously from the global banking system. Why are banks paying out so much to crypto valuation?
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Even though Cryptocurrency is meant to be a currency, in practice, it’s helpful to think of it like gold.
People generally agree that gold has value (like crypto), its value and supply is independent of any government entity (like crypto, unlike regular currency), it’s value doesn’t necessarily decrease over time due to inflation (like crypto, unlike regular currency), and it’s a way to store wealth outside of banks and financial institutions (i.e., you can bury gold bars or a hard drive holding crypto in your backyard).
The issue with gold is that you can’t walk into a store and use gold to buy things – you need currency. You can’t pay taxes in gold, and if you’re a company that runs a hold exchange, you can’t pay your employees in gold. At some point, you need to be able to convert gold to regular currency (or, you need to borrow regular currency from a bank) to operate. Until you can walk into most stores and pay in crypto (which is a long way off, imo), you’ll need some mechanism to convert crypto to normal currency – banks provide that mechanism.
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