For a long time, cryptocurrencies were merely considered a way for traders to make quick money by trading these highly volatile digital currencies whose value may rise or drop in a blink. But, things are changing now. People are now seeing cryptocurrencies for what they really are - a means to perform high-quality, secure digital cross-border transactions at a much lower cost than traditional payments. By offering seamless access to payments and other financial services to people worldwide, including in developing nations, cryptocurrencies have in the past couple of years enabled millions of people in these countries to conveniently and affordably use many basic financial services independent of centralized authorities, which in turn has helped the global economy grow.
As a cost-effective and more efficient alternative to the traditional financial system, cryptocurrencies have the potential to disrupt the global economy for good. Here are some of the ways crypto is changing the global financial landscape.
1. Boost in global economic activities
BY offering a way to perform secure and low-cost financial transactions digitally and from anywhere in the world, Cryptocurrencies have given a visible boost to economic activities worldwide. Many people in third world nations who were deprived of even the basic financial services can now use cryptocurrencies to make and receive payments to/from people globally. Merchants can use cryptocurrencies like the Libra Coin to accept payments from their global customers and pay to their dealers and suppliers worldwide. And the best part is that all of this happens without any regulatory requirements or centralised interference.
2. Making finance accessible to everyone in the world
Cryptocurrencies offer access to a large variety of financial services, and not just payments. Using crypto and exchange, people can practically perform any kind of digital transactions, including payments, money transfers, loans, investments, bill payments, shopping, and many more. This has particularly enabled people in developing and underdeveloped countries to get access to fair and honest financial services such as p2p lending on blockchain and shopping on a global marketplace like the Libra platform.
3. Better financial services at a lower cost
One of the major benefits of cryptocurrencies is that transactions are very cost-effective. Because cryptocurrencies do not need a physical place and workers in order to operate, the operational cost is greatly reduced, which shows in reduced transaction charges. Also, because there are no intermediaries required to verify a crypto transaction, the middleman cost is also waived off. This encourages more people to use this type of payment system, which will in turn help boost the economy.
4. Secure and transparent
Because all crypto transactions happen automatically and securely on a powerful blockchain ledger, where they are encrypted and stored in a distributed public database, all crypto transactions are by default very secure and offer full transparency. Another thing to know about cryptocurrencies is that the blockchain ledger is immutable, which means the transactions and data once stored on the blockchain cannot be changed, which reduces the risk of corruption and fraud through unauthorised access. This will help people trust this system more easily compared to traditional financial systems that are naturally prone to errors and inefficiency.
And last but the least, cryptocurrencies enable small businesses globally to seamlessly trade with businesses and customers in other countries with easy, fast and low-cost payments using digital currencies. This further helps boost the economy by enabling SMEs to grow.