Cryptocurrencies stepped into the world as a means to move away from conventional ways of doing business. Not that having the intricate financial system carry out transactions was a bad thing. It was just rather slow, and a more reliable way to do business across borders was necessary. Of course, things haven’t changed much ever since. The financial system is still very much intact, and crypto assets, while popular, are still scrambling for purchase.
How likely is it, though, to see crypto money replace our well-established ways of doing business? The answer lies in asking ourselves what we understand about cryptocurrencies.
China, the Future of All Things Crypto
In the swirl of cryptocurrencies regulations, newly-fangled projects and crumbled initiatives, one country stands tall above all else. The Chinese Dragon flaps its wings and as it does, it changes vast swathes of the digital world. China has stepped up its game where cryptocurrencies are concerned.
Admittedly, the country has avoided dabbling with traditional assets in the domain, such as Bitcoin, Ethereum, Monero, and in fact, every cryptocurrency that does not answer directly to the government. Instead, the Chinese ruling party has enacted plans to digitalize its economy by relying on a government back FIAT currency.
In fact, China is on the cusp of introducing the first sovereign cryptocurrency, which will allow it to move away from the established financial order and become independent in every monetary sense of the world.
Analysts from McKinsey & Company call China the future of all things digital. The bit-and-byte is in a definite upswing, accounting for 43% of world e-commerce. Things are moving at a rapid pace, though. The digital economy has expanded to include popular mobile payments, which are the norm in the country whereas they have been somewhat mistrusted in the West.
FinTech on the Rise – Digital Money All Around.
Whether cryptocurrencies will be adopted en masse in their current form is debatable. With fluctuating prices that imperil the financial security of their holders, these assets are still too volatile to guarantee financial independence. However, they have spawned a number of FinTech solutions, which allow third-parties to handle trillions of dollars.
In a similar vein, Goldman Sachs forecasts that China’s FinTech sector will grow to $4.4 trillion, using the number of monetary transactions as a gauge. This is not exactly news. The European Central Bank (ECB), the European Union’s chief financial body, has also landed its strong endorsement for FinTech, obliging mainstream banks to collaborate with those projects in a bid to slash costs and boost efficiency.
Back to cryptocurrencies, however, no central banking body has landed its outright support for the existing trade currencies. The ECB has toyed with the idea of introducing its own crypto Euro, but somewhat in passing.
While cryptocurrencies may not be endorsed in their current form, chances are that financial policymakers will continue to seek ways to optimize global trade, reducing costs and transaction times. This will surely mean the use of cryptocurrencies – in one form or another.
The Building Blocks of It All – The Blockchain
The underpinning technology cryptocurrencies use, the blockchain, has been received well. It has already been changing industries, particularly in the shipping domain across Africa. Bureau Veritas, a French certification company, has been driving steady inroads in the continent, propelling blockchain.
The technology has the potential of automating the red tape of carrying out business in a way that makes it instantaneous. Through the use of smart contracts, the system knows when to execute a transaction and how to note it down in a ledger so the books can be used for tax purposes.
While cryptocurrencies ricochet between regulations and high hopes, blockchain is shaping up as the definitive leader of any future economy.
Cryptocurrencies Used for Trade in Daily Life
Cryptocurrencies are far from being used for buying groceries and settling the majority of our bills. Another contentious point lies in the simple fact that they are quite difficult to tax. But they have definitely made their way in activities that we consider recreational, including the online casino.
Many gamers opt for cryptocurrencies, as it introduces an extra level of security and prevents us from divulging too much personal information about ourselves. Enjoying online slots games while using cryptocurrency is quite feasible, by the looks of it.
Beyond that, cryptocurrencies have been changing how we watch things online, and how we influence brands on social media. A multitude of projects has been built around everyday things, such as sending non-cash remittances, launching start-ups, creating relative content, renting a cloud service.
The possibilities are quite numerous. Still, there are the inherent difficulties that come with managing a financial system built upon cryptocurrencies. Crypto assets may indeed be the future of online trade, but a lot of work still needs to be done.
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