Hi hivers, if you're looking for Information regarding "centralised exchange vs custodial banks," Then you have landed in the right place. We are discussing those who safeguard your assets when discussing financial custody. Yes, we have discussed many times that banks manage the finances continuously for a very long time, and similarly, to centralised exchanges working in the crypto, along with the centralised exchanges, we are going to talk about decentralised exchanges. And also, we are going to discuss and compare both of them so that we can reach the final definition.
Custodial banks are very old And serving for a very long time, but they're not serving for free; in return, they're controlling your money. Because they have a tie-up with the government, they play the role of a third party. Let's say if you have deposited an amount in the bank, then the bank is responsible for protecting that fund as well as providing insurance for that amount. By insurance, I don't mean about in the banking term, but it is insurance, it is security. Insurance in the bank is in finance, is a whole new term because it is Whole different concept in banking language. Now, the system is not a perfect solution it cannot survive against the rises. That's the reason Crypto was born.
Other side, there are cryptocurrency exchanges that centralised and when you talk about the centralised exchanges, the first name comes to mind is a Binance. So they are store your crypto for you They also provide the Facility of sell, buy and trade regularly with higher volume. Here is the one big problem, and there is no Security or insurance for you, like you get in the centralised banks. Centralised exchanges are worse than the .centralized banks so in the Exchanges you may lose your money and such incidents have happened in the past.
government, back The banks because they are their partner that does not mean there are no technical glitches, because there is a internal governance exists. Talking about centralised exchanges then they are evolving and increasing their partnership. makig your assets on centralised exchanges means it is fully ensure by yourself one wrong step can harm you. So here the bank is winning but when it comes to the decentralized exchanges, Banks are not even one percent against crypto Decentralised exchanges. And overall, the decentralised economy is powerful and made for people's benefit.
So custody is all about the trust And here the Crypto exchanges (CEXs) And the banks can learn from each other And maybe they will come up together in near future So only future will tell what is going to happen but we should try to focus more on the decentralization in crypto whether it is holding, trading or whatever you want to do also there is a decentralised finance (Defi) That can help you in this particular thing. What is your opinion regarding this let me know the comment section Now I am signing off.
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That's true, if I have to pick between a cex or a bank I pick a bank since state can even cover in case is needed, dex overall is better
My past experiences with some CEX got me to the point where my funds almost got lost and only through bankruptcy they recovered and paid some of it. I believe that in crypto having wallets with self custody are the best as you control your funds at any moment in time. And I think this is the future...