During the last 10 years the whole industry was driven mostly by tech-geeks who wanted to bring into life the idea of complete financial decentralization, where banks don’t play an intermediary role. This idea has captured the minds of everyone, putting everything to the extreme, leaving no space for other ways of technological realization.
Later, cryptocurrencies became infamous due to misuse and lost its original reputation in the eyes of people.
And regardless of these facts, cryptocurrencies slowly take place in our lives, but often governments, banks, and companies can’t come to an agreement which results in a technological slowdown. In the end, ordinary people suffer who simply can’t transfer value without additional overheads.
Some want decentralization, others centralization. But as always, the truth lies somewhere in the middle.
The Problem & Solution
Living in such a bureaucratic age may become cumbersome for some individuals, who value their time and money. And unfortunately, the current financial and legal systems impose serious financial restrictions on how money can be legally transferred and used.
These rules force people to pay huge transaction fees and make them wait for days when they send or receive money. Companies have to cover huge taxes and on top of that pay banks additional money for financial operations.
That creates almost an infinite circle, where entities and individuals lose time and money.
In this situation, the liberalization of financial operations through cryptocurrencies will become the key to this problem. From government and bank perspective, cryptocurrencies impose some risks of inability to tax cash flows, but this rudimentary thinking is damaging the governments and banks themselves because public ledger allows more efficient tracking of all financial operations made inside and outside the country.
Which in the end enables official financial entities to tax cash flows even more efficiently, but with a specific decrease in tax and transaction fees amounts, so that people won’t hide their financial operations and continue using this system.
In this scenario, people and companies get the possibility to send and receive money fast without high banking fees and with dramatically decreased taxes. In order for this to happen, FinTech companies and banks have to develop stable coins that would represent the same value in the same proportion to official money in certain jurisdictions.
It doesn’t mean that existing cryptocurrencies such as Bitcoin, Litecoin, Ethereum, and many others won’t be used legally, on the contrary, everything is going to be legalized. Because in order to buy or sell cryptocurrency for fiat money or certain stable coins you have to go through the KYC process, which ensures the absence of any criminal activities behind these financial operations.
One of the essential players in this field will be FinTech companies that develop officially regulated cryptocurrency exchanges. Those exchanges will have the fiat gateway provided by local banks, which will allow people to buy or sell cryptocurrency officially, paying all necessary taxes.
It’s vital to note, that there should be a minimum of 5 stable coins available in every jurisdiction so that people could simply have a choice where to store their money. Besides that, each jurisdiction should have a minimum of 5 cryptocurrency exchanges as well, because it will ensure the fault tolerance of the new financial system.
The same principle applies to the banking system which is deployed in civilized countries, where each jurisdiction has more than 5 different banks available for its citizens.
Moreover, these cryptocurrencies should transfer value globally and represent the same value on both ends. We have these assets already, and those are Bitcoin, Litecoin, Ethereum and other available stable coins as USDC, PAX, TUSD and many more.
Thereby, when it happens, people and companies will have a choice of how to send and receive money globally and what intermediary to use in the form of cryptocurrency.
I am convinced that with this liberalization of the financial system will be beneficial for governments, companies and ordinary people.
And I believe that giving such type of freedom to transfer money fast, cheap and legally should be mission of many companies in this industry.