Israel’s PM Netanyahu Wonders If Banks will Survive Bitcoin
Prime Minister Benjamin Netanyahu is one of the first leaders to speak out about cryptographic currencies. He told reporters that the reason for using money was concern about fraud and various risks and that intermediaries like banks were therefore necessary. When asked about it, Israel PM stated that the blockchain could be a decentralized alternative to the current centralized banking system. The truth behind what I just said is what’s propelling Bitcoin upwards.” The blockchain can indeed perform all the functions of a bank without the need for an inefficient central institution who takes a transaction cut every time.
All countries use fiat money; therefore, it is the government that defines the intrinsic value of the currency through the central bank. Fiat money exists as stored data, such as records of debit/credit card transactions and bank balances. Money supply is regulated through the fractional reserve system. This is where banks are allowed to make loans or accept deposit as long as they have reserves. The bank reserve is usually less than their deposit liabilities and this makes money supply to exceed the base money. The central banks are usually charged with the responsibility of regulating the process of the money supply. This will always ensure that banks have sufficient funds for withdrawal.
While most world governments’ reactions to Bitcoin range from suspicious apprehension to outright hostility, and countless finance industry figures have predicted its impending demise, Israeli Prime Minister Benjamin Netanyahu has a different take on the situation. According to the head of state, it is banks that are set to become obsolete, and Bitcoin just might be the reason why.
It’s really about more than just money. It’s about power. It always was, and always will be. blockchain technology has threatened the existence of centralized power like nothing else in history has. Many people don’t see it yet, but in the next decade or two, there will be a lot of change, much of it inevitable and unstoppable by centralized powers.
As digital currencies like bitcoin make historic gains and as the start-up nation” of Israel emerges as a key player in the blockchain field, Israeli Prime Minister Benjamin Netanyahu has become one of the first world leaders to weigh in on the cryptocurrency phenomenon, placing the country at the center of the global financial technology revolution.