Crypto Sphere Reacts to Litecoin's Banking Move

Last week, it was revealed that the Litecoin Foundation, the non-profit that facilitates the development of litecoin, one of the largest digital currencies in the world, had purchased a stake in a traditional bank. Predictably, the already heated cryptocurrency debate became somewhat more pointed and divided in response. On one hand, some took the news to be a sure sign of the digital currency sphere's path toward domination of the traditional financial world. Others viewed it as a sign that litecoin was moving in the opposite direction of what other digital currencies have set out to do: to remove themselves from the structure of mainstream banks.

Reactions in the cryptocurrency community were swift and, in many cases, outsized. Coindesk reports that conversations on Twitter among individuals believing that this was a sure sign that the digital currency world was taking over the mainstream landscape often veered to polar-opposite reactions. On the one hand, some individuals cheered the news, calling for the purchase of more banks (and larger ones; the Litecoin Foundation purchase was of a stake in small German bank—WEG Bank AG). Others quickly extrapolated a future in which banks ceased to exist, for better or worse.

Other individuals pushed back against the news, suggesting that the digital currency space is best off remaining uninvolved with traditional financial institutions. To these individuals, news of the foundation's purchase went against the idea that cryptocurrencies aimed to free themselves from the regulatory restrictions and structures inherent in the banking world.

Companies React

Companies tended to view the news with a more level-headed perspective. After all, the foundation bought the shares in WEG Bank AG directly from a new partner called TokenPay, which itself had bought just under 10% in WEG Bank AG a few months ago.

According to an employee, TokenPay believes that the partnership with the Litecoin Foundation will assist in the facilitation of transactions using blockchain, thereby reducing transaction fees and wait times.

Crucially, for some, the news didn't do much of anything to the price of litecoin. Just after the news broke, the price of the coin spiked to $81. Compared with a high of $331 back in January, though, this isn't particularly impressive.

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