The Rise of Cryptocurrencies in 2022
Cryptocurrencies have definitely risen in popularity in recent months, and their rapid growth can be seen in their numbers. Take Bitcoin, for example. Its current market capitalisation has just recently passed 1 billion US dollars and is still growing. The blockchain industry is also seeing a rise in popularity, and it is expected to grow up to 23.3 billion US dollars in terms of market capitalisation.
There are a lot of established cryptocurrencies out there, and each of them was made for a multitude of purposes and had different functions. Some of them have tools and utilities that can make banking transactions easier. They can help make transactions run smoother and faster, convert currencies, and conduct transactions internationally at any time of day. Some crypto-coins like Litecoin take pride in their ability to carry out faster transactions and their ability to make international payments. Because of these transactional innovations, crypto banks are slowly leaving the traditional banking system in the dust.
These days you might often hear words like “blockchains” and “AI”, buzzwords that are currently jumpstarting the transformation of the financial industry. Ever since the cryptocurrency boom caused a growth in cryptocurrency transactions, the financial sector has gone through numerous significant changes. Financial experts believe that the cryptocurrency industry is set to grow by 12% come 2024. At its current growth rate and with how some countries and large businesses are adopting digital currencies, people will soon be cryptos like Bitcoin and Ethereum as modes of payment. These cryptocurrencies have the added advantages of being faster compared to fiat currency, and this innovation is making traditional banks struggle to keep up with the challenge.
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The global financial crisis in 2008 has left its mark on the financial industry and made it susceptible to economic changes. There was an increasing demand in the market for a way to secure funds, and that was when the pseudonymous Satoshi Nakamoto created Bitcoin, the first-ever digital asset in the world. The main and unique selling point for Bitcoin is the fact that it eliminated the need for third-party intermediaries, and it made any form of traditional payment system unnecessary. Bitcoin became such a successful project that it now trades for 50,000 US dollars.
If you look at it from a different point of view, the policies and regulations that the traditional banking system imposes on its users actually create challenges instead of helping its users. And at the moment, cryptocurrencies offer functions and features that no bank can provide. Because cryptocurrencies can offer anonymity and are designed to be very customer-oriented, they are currently in high demand. The decentralisation behind them is believed to be the solution to the problems that extremely complex banking structures create. The concept of decentralisation is completely unique compared to anything that the traditional financial industry has.
The term “cryptocurrency banking” refers to the process of how cryptocurrencies are going to be introduced to the market and how they are going to be exchanged and transacted. There are many cryptocurrency startups that are taking the lead when it comes to changing the industry, but there are also cryptocurrency platforms that allow users to store their virtual assets. These applications would allow their users to conduct their transactions with the use of digital wallets in just seconds. Even if there are security issues that need attention, the blockchain technology behind the majority of cryptocurrencies offers higher levels of security compared to any other banking system at the moment.
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Recently, other institutions like the American Federal Reserve made an announcement that they will be creating their own digital asset, the digital equivalent of the US dollar. According to them, it can be a way for financially marginalised Americans to gain access to the banking system. Through this digital initiative, the American banking system aims to solve the challenges that come with cryptocurrency while also adopting the innovative technologies behind it. There has been a notable decline in the acceptance of old-fashioned banking methods, and it can be seen in the steps taken by companies like Visa, who are making an effort to collaborate with central banks to achieve the customer-oriented approach that suits the demands of the more modern customers.
