How Crypto is Reshaping Finance
The rise of cryptocurrency is changing the way we think about finance. This revolutionary new piece of financial technology has given the entire concept of fintech new meaning, with advanced forms of currency that have more value than some of the fintech companies that use them, and the value of the 100 top cryptocurrencies being nearly double that of the top 100 fintech companies.
If companies in the finance sector want to stay competitive, they’ll need to get on board with cryptocurrency and welcome the next revolution of fintech. Otherwise, they’ll simply get left behind. Learn how crypto is reshaping finance, and discover everything you need to know to make sure you’re prepared for it.
There’s a reason why cryptocurrency managed to outpace the fintech sector despite being a relative newcomer on the scene. This reason is its suitability for international online transactions. Sales opportunities expand when you use cryptocurrency, as it can cross borders much easier than traditional currencies that have to be exchanged. Credit cards are also impractical in some international markets.
Credit cards specifically aren’t really suitable for the internet in the same way that crypto is, and if anyone still needs to hear the news, the internet is where business is moving. When trading online, crypto can help reduce fees and eliminate fraud risk by increasing transparency. In that sense, it’s like being able to pay in cash except you get to do it over the internet.
It’s no secret that the exact value of cryptocurrency can change rapidly. In fact, it’s entirely possible for a currency you’re using to begin a transaction to be worth something entirely different by the time the transaction is over. This is why more legal regulations are in the works to ensure that it’s stable enough for practical use for businesses.
Just because these regulations aren’t in place yet doesn’t mean you shouldn’t prepare for when they are. Several regulatory organizations are already moving forward with strategies to regulate cryptocurrencies in their areas of authority, including the U.S. Commodity Futures Trading Commission, Office of Foreign Assets Control, Financial Crimes Enforcement Network, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency.
You can already see the differences regulation can make by examining different markets around the world that have taken certain approaches. China, for example, banned cryptocurrencies entirely, so they don’t get much use there outside of criminal enterprises. Japan, on the other hand, is far less restrictive, and that has led to a drastic rise in the use of crypto for businesses centered and operating in that country.
More regulation means more financial stability, and that’s going to draw investors and businesses to enjoy cryptocurrency with confidence. While the regulations may not allow for that quite yet in the United States, new regulatory developments make the future of crypto an inevitability.
The Unbanked Market
Around 1.7 billion people in the world are unbanked. This leaves them little option to play a major role in any kind of business or finance. Cryptocurrency can change that, however, by offering a way for everyone to play a role. Cryptocurrency can be a tool for people to participate in the financial system, which means turning them into potential customers for your business.
Transactions with crypto aren’t limited by borders and exchange rates, so people can trade as much as they like without having to worry about middlemen to any significant degree. Every industry and worker can take part in this, including jobs that you wouldn’t normally associate with the concept of digitization, like farming.
Before investing in cryptocurrencies, it’s important to recognize the risks they can potentially pose to you and your business. While a lot of regulations in the future will eliminate some of these risks, it’s still important to understand what needs to be protected against to ensure secure and honest transactions that everyone involved can benefit from.
Crypto functions by giving users a private key they can use to access their funds. Like any other bit of information online, this private key can be stolen through malware hacks and phishing attacks. Cyber theft continues to be a problem, with the transparency of transactions doing little to prevent bad-faith actors from engaging in a faulty transaction from the beginning.
Additionally, crypto prices can be manipulated by focused criminal efforts seeking to pump and dump cryptocurrencies. The lack of liquidity for crypto makes this easier than doing the same for traditional stocks, though that can still be possible too. New regulations to eliminate the inherent lack of liquidity for a lot of crypto forms will go far to prevent this or at least make it no more likely than the same being done to traditional stocks.
Getting On Board
If you’re looking to take advantage of how crypto is reshaping finance, FalconX can help. Whether you’re looking for trade execution, credit management, prime offering, market making or any combination of these, our experts and high-tech systems have got you covered. Start your future in digital assets investment today!