Over the past few years, cryptocurrencies have had a big impact on the global financial niche. Although Bitcoin and most other cryptocurrencies have declined in value in recent months from record highs last year, they now appear to be stabilising. This has led financial experts to conclude that cryptocurrencies are likely to thrive, moving forward. As more and more people buy into the idea of digital currencies and the technology behind them, governments and major financial institutions have been forced to sit up and take notice.
The trends that have emerged, as cryptocurrency gains more traction in the field of global business, are creating new challenges and opportunities for financial sector players. The emerging financial landscape has created room for smaller businesses to grow on the back of trade in cryptocurrencies, while larger financial institutions are starting to see the value in the speed and security offered by the distributed ledger systems pioneered by digital currencies.
A whole range of companies within the banking and FinTech industries are starting to explore ways through which they can take advantage of the electronic ledger technology that powers cryptocurrencies, such as Bitcoin and Ethereum. This distributed system stores data chronologically in segments known as “blocks” which allow for the information to be processed and transferred almost instantaneously (more on how cryptocurrency works).
Among the benefits of the blockchain technology, that make it so attractive to FinTech companies and other large institutions, is the lowered risk of fraud since the technology is notoriously difficult to hack, its speed and the fact that it eliminates intermediary steps between parties in a transaction. It is no wonder that many Wall Street giants, including JPMorgan Chase and the Bank of America, are scrambling to get on the blockchain bandwagon.
However, it is not just the technology that has wowed the industry; the digital currencies themselves have also started to gain the attention of the FinTech world. For instance, Seba Crypto AG, a Swiss financial services company, recently raised about $104 million from a consortium of investors as it seeks to set up the world’s first crypto bank where customers can trade digital and fiat currencies. According to one of the company’s co-founders, Guido Buehler, Seba’s vision is to make it possible for customers to access both fiat currency and crypto within the same online bank account.
Although the crypto markets have seen wild fluctuations over the last year, they continue to be adopted by people from all over the world in staggering numbers. This means that central banks, governments, and other regulatory bodies have had to step in to try and create some order in an industry that still has a bit of a “Wild West” feel to it. For instance, the U.S. Treasury recently released a report that explores the current financial system, talks about cryptocurrencies and lays out proposals for sweeping changes aimed at reducing regulatory inefficiency, while incubating emerging technologies like blockchain.
Titled “A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation”, the report was drafted for President Donald Trump by Treasury Secretary Steve Munchin.
The report covers an extensive range of issues, a large number of which are extremely pertinent to the world of cryptocurrencies. It also acknowledges that the U.S Treasury has taken note of the rapid growth in the use of cryptocurrencies and digital and mobile banking as well as the increasing development and adoption of blockchain technologies. They also recommend the importance of the government’s support in cryptocurrency innovation, which they believe will improve financial services and reduce costs.
Interestingly, Arizona was the first U.S. state to recognise cryptocurrencies and to allow FinTech companies to test their services and products for up to 2 years and with as many as 10,000 customers before requiring a license.
In line with the realisation by governments of the importance of cryptocurrencies and their associated technologies, some government departments have moved to be involved in a more “hands-on” manner. Early this June, the U.S. Securities and Exchange Commission (SEC) announced that one of its veteran legal advisors, Valerie Szczepanik would take on the role of associate director in the Corporate Finance Division and would be the SEC’s senior advisor for Innovation and Digital Assets.
Many in the industry welcomed this move, as they feel that Szczepanik would help to rationalise how U.S. securities regulations apply to cryptocurrencies, while also helping to coordinate oversight with other regulatory agencies.
In addition, in an initiative led by Szczepanik, the SEC launched a portal that would help it to engage with organisations developing and using artificial intelligence, blockchain and other technological advances that are becoming more commonplace in the field of investment and finance. Known as the Strategic Hub for Innovation and Financial Technology, or FinHub, it is designed to provide a single access point for the tech entrepreneurs involved in FinTech to easily access the SEC.
Without a doubt, cryptocurrencies, the underlying blockchain and other distributed ledger technologies are now being taken seriously, not only by governments and regulators but also by the banking, finance and clearing sectors. In fact, a study by Greenwich Associates indicates that 94% of financial professionals believed that blockchain technology is necessary in institutional markets, while half of those surveyed were actually exploring use cases.
To put it into perspective, the NASDAQ is currently gearing up to become the first stock exchange to utilise blockchain technology by the end of this year. The potential of this system to create more secure, efficient and quicker transaction processing within the FinTech space is a proposition that is evidently too attractive to ignore any more.
|#||Crypto||Prediction||Accuracy||CVIX||Price||24h||7d||Market Cap||7d price change|
|1||BTC||Bitcoin predictions||90.8%||9||$27 055.66||-0.39%||-0.48%||$524 669 725 967|
|2||ETH||Ethereum predictions||90%||5||$1 894.98||-0.35%||2.42%||$227 844 872 746|
|3||USDT||Tether predictions||95.6%||1||$1.000174||-0.02%||-0.02%||$83 166 973 934|
|4||BNB||Binance Coin predictions||91.2%||3||$306.07||0.02%||-0.90%||$47 702 595 499|
|5||USDC||USD Coin predictions||96%||1||$0.999825||-0.02%||-0.03%||$28 899 378 488|
|6||XRP||XRP predictions||74.4%||45||$0.521971||-0.71%||10.46%||$27 135 704 360|
|7||ADA||Cardano predictions||90%||5||$0.379124||0.50%||1.62%||$13 229 192 372|
|8||STETH||Lido stETH predictions||96%||1||$2 941.39||-0.40%||-3.32%||$10 258 752 564|
|9||DOGE||Dogecoin predictions||90%||10||$0.072640||0.31%||-0.21%||$10 142 142 620|
|10||SOL||Solana predictions||83.6%||26||$21.32||0.78%||3.90%||$8 462 207 094|
|11||MATIC||Polygon predictions||85.6%||24||$0.900797||0.34%||-2.83%||$8 358 921 794|
|12||WTRX||Wrapped TRON predictions||74.8%||41||$0.081746||-1.70%||5.86%||$8 311 630 709|
|13||TRX||TRON predictions||78.4%||46||$0.081857||-1.78%||5.79%||$7 382 911 123|
|14||LTC||Litecoin predictions||76.4%||43||$95.17||0.50%||5.92%||$6 953 692 629|
|15||DOT||Polkadot predictions||92.4%||7||$5.34||1.42%||-0.72%||$6 356 795 655|
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