Digital Currencies are Changing the World of Finance
Cryptocurrencies have been making waves ever since they were introduced to members of the online trading community. Digital currencies aren’t just a promise; they are currently being applied to various uses. Along with blockchain technology, they continue to take businesses to areas that were previously untapped. Nowadays, it’s hard to go a single day without the mention of cryptocurrency in the news. Goes to tell just how far they have come in a very short while.
What Are Cryptocurrencies?
Cryptocurrency refers to electronic money that is used in online transactions. This money is stored in electronic wallets or computer files. Some common cryptocurrencies include Bitcoin, Ethereum, Ripple, Litecoin, etc. The blockchain technology is used in transferring and monitoring cryptocurrency transactions.
How Will Cryptocurrencies Change the World?
Much has been said about how cryptocurrency will revolutionize future payments, services, businesses, and by so doing, change the world. Some of these much talked about changes include:
Strengthen e-commerce: It appears that more and more people now shop online most of the time. Cryptocurrency gives individuals even more reasons to become used to the convenience of online shopping, as it mitigates the risk of fraud for both vendors, sellers, and shoppers and eases consumer concerns regarding the safety of their personal information. It is also expected that cryptocurrency will facilitate online shopping more efficiently than fiat currency since it does not have to observe international rules or comply with trade restrictions.
Ease cross-border transactions: Cryptocurrencies keep challenging conventional monetary systems in many regards. One of these areas is money transfers. Digital currencies such as bitcoin are as much of freely convertible money as there can be. More so, their fast execution times and meager transaction cost makes them the ideal resources for cross-border money transfer. It is no wonder currencies like Ripple are taking over with cross-border transactions.
Help increase global remittances: Older money transfer firms like MoneyGram and Western Union are not cost-effective. Typically, foreigners are charged a high percentage as commission when they send money to their home country. Asides the high commissions, funds transfers made through money transfer operators like Western Union are not processed on time. Cryptocurrency transfers, on the other hand, are highly cost-effective and occur in real time. Such advantages are expected to enable digital currencies to drive growth in foreign remittances. The fact that users could also process transfers directly from their mobile devices from any location will also help encourage participation.
Faster transfers: As already mentioned, cryptocurrency transactions are processed instantly. This means that market participants need not wait for days or weeks for transfers to be confirmed.
Beyond these, cryptocurrencies may also help bring stability to unstable fiat currencies, phase out the currency exchange system, give people more control over their own funds, and provide scalability, among others.