Apr 7, 2022
Last year was what Flagship Advisory Partners described as a ‘breakthrough year for crypto’, with its market capitalisation reaching close to $3 trillion in November 2021.
Cryptocurrencies remain a hotly debated space. The industry has emerged alongside an age where social media claims and trends compete with traditional media’s efforts to report facts. This has made it challenging to explore the facts around a booming financial trend.
To make matters even more complex, the world of cryptocurrency moves incredibly fast. Furthermore, with this great speed comes a complexity that even some of the most experienced financial services experts struggle to understand.
So, let us take a look at some of the main perceptions around crypto.
Yes, global financial institutions are not really that supportive of the whole idea of cryptocurrencies. And there will likely be a lot of domestic and international regulations on the way for the industry. However, what people often forget about when they discuss regulation is its numerous upsides. With clear rules and the right guidance, the crypto industry can evolve to protect everybody better and make sure there is a safe environment conducive of a healthy growth and a wider blockchain adoption.
Fintech has helped change the way financial services are delivered in the past decade. Many cryptocurrency companies claim they can do the same, with even more disruptive and revolutionary outcomes. The thousands of social media posts do not help these claims from influencers who claim to have gotten rich quickly by investing in one cryptocurrency or another.
The promise of cryptocurrency is much larger, and it can move beyond driving individual wealth to support collective wellbeing and financial access. In emerging markets, the vast majority of the population does not have access to financial services. It is difficult to open a bank account, access any form of credit services, or secure a credit card. And that is a barrier to economic growth and economic development in these countries.
Blockchain technology — the firm foundation that cryptocurrency has risen from — can help emerging markets leapfrog from outdated legacy systems to the latest technology without the need to go step-by-step through the fintech revolution as other developed nations have.
Again, the promise of crypto goes far beyond its use cases. Think of payments and remittances. Latin America is one of the biggest remittance markets in the world, a place where many of the countries speak Spanish or Portuguese and share different-but-adjacent cultures.
Money movement is critical in Latin America. But dominant payment providers can be costly, slow, and risky. For example, if you live in Paraguay and want to send money to Uruguay, it’s often not easy. However, faster disbursements are possible with the boom in smartphone ownership and the emergence of crypto wallets and blockchain payment systems.
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