logo facebook
Bitcoin 2 mins

Bitcoin a Safe Haven in the face of Italian Banking System Crisis

Avatar Guest Author 3 years ago

Monte Dei Paschi, Italy’s third largest bank is in eye of the storm, as its shares fell by 12% on Wednesday ahead of a deadline for recapitalisation.

Italy’s banking system is on the verge of a meltdown with the oldest bank in the world falling short of 3 billion euros. Other big names, like UniCredit, are in equally bad shape. It was uncovered by Wells Fargo that nearly 15% of all loans held by Italian banks could be at risk of default.

Though the Italian parliament has authorised the government to use more than $20bn (£16.8bn) to intervene, a state bailout could be in breach of European Union rules. Another proposed solution is to increase the public debt by as much as 20 billion Euros, but this proposed amount does not even generate enough to keep the affected banks afloat.

As we have seen, the global crisis of recent years began with a banking crisis. And even the current Italian banking system implosion can have severe repercussions on rest of the world.

What is in stark contrast to the current Italian banking system crisis is the ‘safe haven’ status of Bitcoin during the times of market volatility. Bitcoin provides the transparency of distributed ledgers, which require no third parties to receive or make payments.

Moreover, no banks can be bailed out, as Bitcoin is a full reserve system unlike the fragile fractional reserve systems.

Other advantages with bitcoin are that it can be bought at any exchange working with cryptocurrency and the bitcoin payment can be cashed out without any hassles. The recipient is not obliged to cash out the received bitcoins, as these can be stored in the wallet until the next calculation. Bitcoin also serves as an investment tool or simply as a means of savings.

The strongest case is made by the government’s inability to impose debt on future generations with Bitcoin. Therefore, in times like these when the world economy is predicted to take a tumble, the idea of bitcoin becomes infinitely more appealing.

Tags: BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?

Instant Crypto Credit Lines™ from only 5.9% APR - unlock your crypto-wealth tax-efficiently, without selling it. Earn up to 8% interest per year on your Stablecoins, USD, EUR & GBP. $100 million custodial insurance.

Show comments