Short Description: The lure of cryptocurrencies has gone fever-pitch around the globe and clearly, the facts show that they do not constitute a threat to financial stability, but to the old ways of doing things.
The crypto scene has faced its own share of overt and blatant negative threat in the past one year as its rave spread across the globe. One thing is sure, the adoption rate is gradually building up in many countries. Beyond the fear that it could take the turn of the famous bubble and crash to zero, the price of crypto has shown some resilience that is outstanding.
Bankers Hate Cryptocurrencies
Obviously, bankers have a reason to hate cryptocurrencies. The rise of bitcoin and the altcoins indicates that traditional banking clout faces erosion if it is not tweaked. The subject of value transfer, payments system and e-commerce has undergone redefinition with the simplicity of crypto use riding roughshod globally.
Instead of banking institutions owning up to the fact that their turf can be eroded with the advent of crypto, many have opted for sheer blackmail. Last January, the Bank of International Settlements essentially said that Bitcoin had no value. Fast forward to January 2019, and the feedback has changed. Now, the BIS says Bitcoin only needs to modify its POW algorithm to make it more responsive.
Around the world and especially in crypto-literate circles, what has become obvious is that banking can transform in order to align with crypto realities. The tech-savvy generation in most countries has tasted the ease of use and bureaucracy-less nature of crypto and obviously, it sticks. While in its early days crypto was viewed with greater skepticism, it has turned the corner now.
Blockchain adoption in banks can be said to be mixed. While most of the known brands are dithering on what to do, others are already following the money. The clear antecedent that can be seen is that as the regulation framework reaches a consensus, the tide would change. The IMF already called for the crafting of legislation to guide crypto financial markets. In America, the regulators have taken the middle ground. Allowing for time to unravel what could be the bottom of bitcoin seems to be the present phase.
Going further, the optimism for the approval of Bitcoin ETF has surged and crashed over the last six months. Many see a final approval as the tonic needed to breathe a new invigoration into crypto markets. Despite the lacuna in decision making by SEC so far, the market has trudged on. To many people, the resilience of crypto markets despite the bad press shows it has more to offer.
The Cryptocurrency World Economy
Cryptocurrency has grown into a particular mold of its own with the rise of innovative payment apps and trading methodologies. While it seemed that the sector would disappear at the height of its 2018 woes, the increasing adoption today tells a different story. More merchants are accepting crypto payments as app integrators proliferate on the scene. Now, the fear of having a tulip on your hands is gone.
One major hit on any payment facilitator is a loss of credibility. This has affected several national currencies in the past, and it still does. Forex traders are wont to activate a sell-off when news filter in of contractionary monetary policy. So, with crypto, professional traders have also learned to ride the wave.
The wise investor knows how to buy low and sell high. Ascendingly, reading the market mood also plays a role in determining the losses incurred or gains made. So, whether as a crypto payment recipient or a hodler, knowing that the crypto in your hands won’t crash to zero is comforting. But, how do you determine such?
What is known is that cryptocurrencies are not all the same. Some have more acclaim and going-concern assurance than others. While several shit coins might be out there, most of those on the crypto 100 list are recommendable. Therefore, following the trend of market reports and having a grasp of the underlying use case is key.
Beating Money Laundering
Anti-money laundering and KYC requirements have become self-imposed by many cryptocurrency exchange firms. Same goes for crypto promoting companies who receive or warehouse same for any reason. Blind accusers of crypto as a money laundering enabler have failed to note that money laundering has persisted across traditional channels to date.
As AML/KYC rules become commonplace in the crypto world just like in banks and other financial institutions, the bite of crypto traducers would lose its fang. Anonymity-driven crypto might eventually lose its space as the market evolves. And since this is largely accepted, it would do little harm to crypto fortunes as the market of the segment is slim.
From available records, the best cryptocurrency exchange by patronage globally already have AML/KYC in place. So, it is a clue that many crypto users are in it for its utility and not for anonymity. Time was on the earth when Swiss banking havens never lifted the veil on its customers. Today, the demands of global justice require their compliance when the need arises.
Placed side-by-side, the evolution of the global crypto market has accelerated in such a short time compared with traditional banking. This by every means should be a pointer that the world can do with crypto if regulation is not obstructive of its ends.
The future surely holds a bright spot for crypto adoption around the world. Many people already use crypto for money transfer purposes. Others use it for payment of bills, and even a greater maturity see its trading as a goldmine.
With such a diverse application of crypto on the horizon, bankers have a reason to embrace it rather than treat it with scorn.
As institutional investors, regulation authorities, and other stakeholders reach a consensus on crypto use and governance, the world will be better for it. The ease of use of digital currency and the clear sidetracking of obstructive modalities in its operation is a harbinger for its enduring future.
Stevan Mcgrath, is a Bitcoin and cryptocurrency enthusiast, passionate about the potential these tools and blockchain technology bring to the world and writes consistently. He has been following development of blockchain for several years. To know his work and more details you can follow him on Twitter, Linkedin.