Banks are the whip and buggy of the technology era.

We can video chat in real time with anyone on earth. Self-driving cars can escort passengers across town. Satellites thousands of miles above the earth can pinpoint our location within inches.

Yet it still takes three days to send money from, say, Chicago to Mexico City.

That’s because the global financial system relies on decades-old technology.

Blockchain and cryptocurrencies are changing that.

They threaten not just the old way of doing things… but entire business models.

And the banking industry is first in line.

Financial institutions that rely on antiquated ways of doing things are going to have to adapt… or become obsolete.

Today, I’ll show you why. And I’ll explain what this means for the future of cryptocurrencies…

Banks haven’t accepted the crypto revolution – yet.

The most obvious financial system for disruption is international money transfers. The World Bank estimates $689 billion will flow across borders in 2018, as migrants and immigrants send money home (what’s known as “remittances”).

Fees on those money transfers range anywhere from 5% to 9% (or even higher for small-sum transfers). Those fees generate more than $30 billion in revenues per year for financial institutions.

Cryptos are designed to transfer money with low costs, nearly instantaneous transactions across borders, and increased security, reliability and flexibility.

But banks have resisted innovations like this. It’s hard to blame them. They’re sitting on a $30 billion cash cow. That’s probably part of the reason why many banks have expressed skepticism (even hatred) toward cryptos.

For example, Jamie Dimon, the CEO of JPMorgan Chase, has called bitcoin “stupid” and a “fraud”, among other things.

But not everyone is blind to crypto’s potential. Even the International Monetary Fund (IMF), the very definition of a slow-moving financial bureaucracy, is looking into how cryptocurrencies can interact with central banks. Recently, it said central banks may issue their own cryptocurrencies one day.

“Above all, we must keep an open mind about crypto assets and financial technology more broadly, not only because of the risks they pose, but also because of their potential to improve our lives,” IMF Managing Director Christine Lagarde said.

Whether or not banks want it, crypto technology is already changing the banking world…

For example, in early October, an international money transfer platform that’s as much as 70% cheaper than existing solutions launched consumer testing. On this platform, it doesn’t take days to move money across international borders… it takes seconds. And it’s powered by crypto.

The platform also frees up large chunks of capital for banks. No longer will they have to fully prefund accounts in local currencies, leaving it there in anticipation of future transfers.

Now, local currencies can be converted into crypto, instantly sent around the world, and converted back to whatever local currency the recipient desires. That gives banks access to cash they’d once left sitting in foreign bank accounts.

Consider what happens if a company wants to move money between Mexico and the European Union. It currently takes two to three days to send $1,000 across the Atlantic, and it costs between $40 to $75. With crypto and blockchain technologies, that same transaction can be completed in two minutes at a cost of $0.02.

It’s a huge step forward, with staggering implications.

If you look at overall global money flows, more than $155 trillion crosses international borders every year. And these cross-border international money transfers generate some $300 billion in revenue for banks, according to management consulting firm McKinsey & Company.

It’s a matter of time before crypto and blockchain technologies prove they can save banks and consumers huge sums of money and time. As more banks come on board, we’ll see even more benefits.

Faster transfers will lead to accelerated money velocity – the pace at which money changes hands. That, in turn, will speed up international business, boost productivity, and ultimately accelerate innovation.

In this new environment, the earliest adopters will see the biggest profits – while driving down costs for consumers. Slower-moving banks will be forced to adapt or lose their customers. (After all, a customer doesn’t care about the technology behind a bank. He just wants services to be reliable, fast, cheap, and easy to use. If a bank can’t keep up, the customer will go elsewhere.)

Revolutions don’t always start with a bang. Some start small, gathering strength and speed until they’re so big that anyone committed to the old way of doing things is swept aside.

Crypto is small now, but I’m certain it will revolutionize the way we bank. And it’ll happen far faster than anyone suspects.

When it does, cryptocurrencies like bitcoin will finally go mainstream. And that means now is the perfect time to invest in these unique assets.

Investors who get in ahead of this big shift could earn spectacular gains. Don’t miss out.

Good investing,

Eric Wade

Strange change at your bank [sponsor]
At least 41 major US banks have just made a drastic change to the way money in America works. It could have some major implications for you, your money and your retirement. But it's crucial you understand what's happening, before these changes get applied to your bank account. Here's everything you need to know.

Source: Daily Wealth