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Why The Growth Of Cryptocurrency Is Inevitable?

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By Author: shubh
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Growth of cryptocurrency in inevitable
As of lately, Bitcoin’s price has dropped to $16844 from its ATH of $69,045. This bear market has allowed sceptics to again question this breakthrough technology’s potential.

However, despite the widespread negative sentiments, a large community believes in the new form of money and the distributed ledger behind it.

The community builders believe the cryptocurrency’s growth is inevitable, and in this article, we will discuss, why?

The Future of the Blockchain Technology

Blockchain has immense potential to change the current financial and banking domain. Whether it is cross-border payments, peer-to-peer transactions, insurance, auditing capital market, or lending and borrowing, all services crucial for a nation’s economy can be brought on-chain to strengthen security and transparency, ensuring a more efficient financial ecosystem.

International Payments
Have you ever tried making a cross-border payment? If yes, you might be aware of all the hassle that you have to go through. Despite putting in so much effort, transferring money from ...
... one country to another takes at least 3–4 business days.

Cryptocurrency solves this problem by removing the barrier of the intermediary from the pipeline.

Blockchain provides a way to securely and efficiently make transactions from one wallet address to another. This makes it a preferred choice for international payments.

An excellent example of this scenario is when Polygon founder, Sandeep Nailwal, raised $2.2 million to help India battleCovid-19 amidst the pandemic.

In an interview, Sandeep said it could become possible only because the mode of raising money was cryptocurrencies. It could not have been possible if he was to use traditional payment mediums such as IMPS or NEFTs.

Capital Markets
Exchanges are often responsible for a variety of services, such as matchmaking, liquidity management, IPOs and licensing.

Blockchain has the potential to improve the operations of exchanges. Reduced transaction charges and faster trade settlement have the potential to decrease the overall costs. It will enhance the customer experience and create a more secure and faster ecosystem. Further, the distributed ledger technology can also strengthen the KYC process and AML compliance as well. Transparency in the capital market can also encourage retail investors to actively participate in the market, which can eventually improve the nation’s economy.

Regulatory Compliance and Audit
As per the report by Deloitte, the use cases of the blockchain in accounting and auditing are still being explored. However, multiple auditing firms have started exploring the technology. Blockchain can potentially change the way we record and maintain financial data.

Currently, the auditing procedure is not liable to provide absolute assurance of the financials of the organizations. However, once all the data and records are maintained on the distributed ledger technology, it will become easy for an auditor and regulatory bodies to verify the authenticity.

Changes in business models and business processes may impact back-office activities such as financial reporting and tax preparation.

Money Laundering Protection
The estimated amount of global money laundering is around $2 trillion per year. This is equivalent to the economy of some developing countries.

Integrating the Smart Contracts in a Blockchain-based AML platform can automate the process of fraud detection in the system.

It will keep a continuous check on every transaction, and automatically generate an alert for a suspicious transaction. The smart contract can be designed in such a way that the potential problematic transactions can be restricted automatically.

Using a cryptographically secured, decentralized, and transparent network can potentially reduce Money Laundering activities.

The New Payment Method
This is the most controversial topic. There is a high number of bitcoin believers who believe the future of currency will be on a decentralized network where no central authority will be in control to adjust the purchasing power of any currency, and it all depends on the market forces.

Further, the current monetary ecosystem has several problems, such as unwanted interventions and lack of privacy. A distributed ledger technology such as bitcoin solves this problem.

Further, people need to trust the government and the banking institutions for the safety and preservation of money value. If the parties involved can’t handle it appropriately, the entire monetary ecosystem can be collapsed. A great example of this troubling situation is Zimbabwe with Hyperinflation. It was the result of the excess printing of money in response to the economic disasters happening in the country.

Final Words
Blockchain is still at its nascent stage, and the technology can potentially revolutionize the entire financial domain. Further, corporates have started exploring the use cases of blockchain technology in the supply chain and operations as well. Though the market is going through a terrible breakthrough, the rising community participation is also contributing to the inevitable growth of cryptocurrency and blockchain technology.

Crypto products are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.
This is not an investment advice. Please do your own research before investing.
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