Saturday, January 23, 2021
  • Contact Us
  • Privacy Policy
FIND CRYPTO NEWS
Advertisement
  • Home
  • Latest News
  • Crypto News
    • Bitcoin
    • Ethereum
    • Ripple
    • Litecoin
    • Altcoin
  • Live Cryptocurrency Prices
  • Analysis
  • Blockchain
  • Regulation
  • Trading
No Result
View All Result
FindCryptoNews.com
  • Home
  • Latest News
  • Crypto News
    • Bitcoin
    • Ethereum
    • Ripple
    • Litecoin
    • Altcoin
  • Live Cryptocurrency Prices
  • Analysis
  • Blockchain
  • Regulation
  • Trading
No Result
View All Result
FindCryptoNews.com
No Result
View All Result
Home Analysis

Legacy Finance Is Running Out of Time

June 17, 2020
in Analysis
9 min read
Legacy Finance Is Running Out of Time
585
SHARES
3.3k
VIEWS
Share on FacebookShare on Twitter

You might also like

Bitcoin Traders Expect Volatility as Options Expire

On-Chain Analysts Identify More Whales Are Buying Bitcoin Dip

Crypto.com Predicts Bitcoin & Ethereum Trends for 2021

Key Takeaways

  • Digital dollar proposals offer a vision of a better future, but they likely won’t manifest in the midst of the latest crisis.
  • Many neobanks and digital wallets have been working on this issue for more than five years.
  • The crisis has revealed the cracks in our system, but what will we do to fix them?

Share this article

Everything about the world’s financial system needs an upgrade. This fact became even more true amidst one of the deadliest health crises in over a century. Unfortunately, if regulators and entrepreneurs aren’t careful, they will do irreparable damage to institutions like the U.S. dollar. 

And at a time like this, even the slightest mistake could see America’s hegemony dissolve in an instant.

Legacy Finance Balances Speed with Innovation

Despite the pace of technology, the public sector’s resistance to change is striking. This trend is even more evident when one examines financial infrastructure. 

From decrepit code like COBOL to distributing paper checks amidst a deadly health crisis, everything about how we think of moving money needs upheaval. The Federal Reserve isn’t nearly as nimble as your favorite Silicon Valley startup, however. And for good reason.

For all the founders writing Medium articles and stoic tweets about life or death for their seedling businesses, the health of the U.S. dollar is critical to global stability. 

Source: Twitter

In an interview with Crypto Briefing, a co-founder of the Digital Dollar Foundation and former chief innovation officer at the CFTC, Daniel Gorfine highlighted this point. 

Along with former CFTC commissioner, Christopher Giancarlo, the Digital Dollar Foundation and Accenture are working on tokenizing, not merely digitizing, the greenback. Gorfine said, “We’re still very early, but there’s no rush. We can’t get this wrong. It’s the U.S. dollar after all.”

Instead of moving fast and breaking things, initiatives in crypto, as of late, are valorizing quality over speed. Irreversible code that channels millions of dollars, let alone the roughly $1.9 million Federal Reserve notes in circulation, needs to be full proof. 

Failing to do so has already led to several hacks, bugs, and exploits in the crypto space. 

Despite its novelty, the move to tokenize the world’s reserve currency has slowly been gaining momentum in Washington. Both Giancarlo and Gorfine first wrote about the idea in a Wall Street Journal op-ed in October 2019. 

Gorfine said that he encountered blockchain technology and cryptocurrencies throughout his tenure at the CFTC. 

“There is better technology that should impact financial services,” he said. “Take the way we move assets, for instance. It’s like how we adopted email and made sending letters nearly obsolete. Tokenization can do something very similar.”

The project finally launched in January this year and has been earning fans ever since. “We’re not really running into opposition,” said Gorfine. “The topic is worthy of exploration, even for skeptics.”

Accenture, a global business and technology consultancy, was on board immediately to help with this digital upgrade. Both Accenture and the Digital Dollar Foundation make up the Digital Dollar Project.

OKCoin - With USD

“We have extensive experience with other central banks working on [Central Bank Digital Currencies] CBDC’s,” said managing director of the firm’s banking and capital markets strategy, Danielle Martell. 

Looking across the current landscape, Accenture has had a hand in developing digital currencies for Singapore, Sweden, Canada, and Europe’s ECB. Their roster of experts and heaps of experience makes them an ideal partner for the venture. 

Though these countries already have a head start, along with China’s swift progress on its CBDC iteration, the duo explained that this is less about competition and more about “future-proofing” the dollar. 

“This is not a defensive measure, but an offensive opportunity,” said Gorfine. “We want to upgrade the infrastructure of a public good, drive efficiency gains, reduce costs, and improve financial inclusion.”

This inclusion also hinges on a broadband connection. It might not seem like an issue, especially in a country like the United States, but this was a significant concern in the latest discussion in the House Committee on Financial Services last Thursday. 

Statista Chart of Broadband Activity in the US
Active Internet users in the United States as of January 2020. Three hundred twenty-eight million people are living in the U.S., indicating roughly 87% of Americans are also Internet users. Source: Statista

Despite the importance of moving slowly, but correctly, it is unlikely that a digital dollar will serve Americans currently suffering from the coronavirus pandemic. 

Paper Checks in a Digital Economy

The rapid spread of the coronavirus has revealed many systemic problems with our world.

From supply chains to the social woes of lockdowns, the effects have been felt across every sector. These effects have been the most dramatic in the high unemployment rates in the United States. 

As such, President Trump doled out $1,200 to every citizen. For many, these checks didn’t arrive until May. The crypto community scoffed at the gesture; during a lockdown, why is the government sending paper checks only redeemable in person?

Distributing money more effectively has been the bread and butter of the broader fintech industry. 

Long before the health crisis, neobanks and blockchain entrepreneurs have been working hard to reimagine value. This included the likes of Revolut, Monzo, Crypto.com, Uphold, and many others. 

Michelle O’Connor, the VP of Marketing at Uphold, told Crypto Briefing in an interview:

“We actually digitized the US dollar back in 2014,” she said. “Crypto can solve a lot of issues, but we still need a bridge to legacy finance. At the same time, we can beat legacy finance and banks on the high fees.”

Uphold is a unique, long-standing crypto company. It’s a digital wallet that allows users to hold commodities, crypto, and various fiat currencies. “We’re really solving for the expat,” said O’Connor. The platform also offers a unique vision into a fully-interoperable world.

Cred - Crypto that isnt cryptic

With the Uphold debit card, users could buy gold on the platform, sell it for Digibyte tokens, and then use those tokens to purchase dinner at their favorite restaurant. 

Thanks to digitization, we have returned to a barter system. It would appear that users are taking notice too. 

The company reported 375% more new customers in Q1 2020 than in the same period last year. Between April and May of this year, the number of exchange transactions more than doubled. O’Connor also added that there were many $1,200 purchases right around the time that checks were distributed. 

“We’ve seen an enormous uptick in the number of signups to the platform as well as from people buying Bitcoin,” she said.

Long Bitcoin, Long Innovation

Upending a system that has been in place for over a century is going to take time. 

The initiative will also include far more than just the U.S. dollar or Bitcoin. At the same time, the latest crisis offered a unique glimpse into the fragility of how the world currently operates. 

It also offered an opportunity for bold ideas. And the Digital Dollar Project wants as many people as possible to participate in this opportunity. This is, in part, why the latest white paper fails to dive deep into too many technical details. 

“The technical component is missing because we want to keep the discussion as open as possible,” said Martell. “Still, privacy-compliance is really important to work through. We need a new, flexible technology to meet our fast-changing world.”

Bitcoin and a national cryptocurrency aren’t antithetical either. Edgar Fernandez, a co-founder of EOS Costa Rica, told Crypto Briefing, “there will always be a need for decentralized, censorship resistance value exchange. I don’t think CBDCs will allow that, and consequently, they will not compete with BTC.” 

As Martell mentioned, privacy concerns will be a critical component for a CBDC. Although most cryptocurrencies are highly-traceable, there is an effective range of mixing and obfuscation services that can help hide user identities. This likely won’t be the case with a national cryptocurrency.

Alex Wearn, the CEO of the decentralized exchange IDEX, said: 

“CBDCs will almost certainly be restricted to transfers between known parties, which makes them more of a competitor to products like Libra than Bitcoin or Tether. But perhaps their introduction is what prompts regulators to become more strict on existing stablecoins which currently only monitor entry and exit points.”

Ultimately, the world we live in today is on course to change dramatically. It will be one in which state-sponsored currencies operate alongside sovereign assets like Bitcoin or Ethereum. 

It’s far too challenging to identify how long these technologies can coexist, but that shouldn’t stop regulators and entrepreneurs from designing a better future beyond legacy finance.

Disclaimer: Crypto.com is a sponsor of Crypto Briefing.

Share this article

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Bitcoin Wallet Provider Offers Access to Amazon, Spotify, and HBO

Former Trump Advisor Joins America’s Digital Dollar Move

Crypto.com Earns Major Security Accreditation Following Third-Party Au…


Credit:
Source link

Previous Post

Binance Getting Ready to Launch a New Fiat-Crypto Trading Platform for UK Residents

Next Post

Kraken CEO Seeing 'Massive' Demand for New Accounts From 'Everyone'

Related Posts

Bitcoin Traders Expect Volatility as Options Expire
Analysis

Bitcoin Traders Expect Volatility as Options Expire

January 22, 2021
On-Chain Analysts Identify More Whales Are Buying Bitcoin Dip
Analysis

On-Chain Analysts Identify More Whales Are Buying Bitcoin Dip

January 21, 2021
Crypto.com Predicts Bitcoin & Ethereum Trends for 2021
Analysis

Crypto.com Predicts Bitcoin & Ethereum Trends for 2021

January 20, 2021
Fundstrat Strategist Posts $10,500 Ethereum Target for 2021
Analysis

Fundstrat Strategist Posts $10,500 Ethereum Target for 2021

January 20, 2021
Is Chainlink Centralized? A Breakdown of Token Distribution
Analysis

Is Chainlink Centralized? A Breakdown of Token Distribution

January 19, 2021
Next Post
Kraken CEO Seeing ‘Massive’ Demand for New Accounts From ‘Everyone’

Kraken CEO Seeing 'Massive' Demand for New Accounts From 'Everyone'

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recommended

Stellar Lumens (XLM) Community Seed Fund Deadline Nearing

Stellar Lumens (XLM) Community Seed Fund Deadline Nearing

January 11, 2021
Digibyte (DGB) Being the Improved Version of Bitcoin Better in Progression toward Faster Payments

Digibyte (DGB) Being the Improved Version of Bitcoin Better in Progression toward Faster Payments

August 4, 2020

Don't miss it

Crypto News

Cosmos (ATOM) Geared Towards Facilitating True Interoperability

January 23, 2021
Rick and Morty-Themed Crypto Art Sells for $290,000 on NFT Marketplace
Regulation

Rick and Morty-Themed Crypto Art Sells for $290,000 on NFT Marketplace

January 23, 2021
IOTA Getting Busy With More Smart City Projects on Blockchain with OBSR Foundation and Tanglehub
Crypto News

IOTA Getting Busy With More Smart City Projects on Blockchain with OBSR Foundation and Tanglehub

January 23, 2021
Bitcoin Traders Expect Volatility as Options Expire
Analysis

Bitcoin Traders Expect Volatility as Options Expire

January 22, 2021
‘Airdrop Madness’: Crypto Trader Asks Investors to Keep an Eye out for Free Tokens
Regulation

XRP Token Holders to Receive Second Token Airdrop from Flare Finance

January 22, 2021
Bitcoin Rallies Towards $24,000 as Market-Wide Uptrend Continues
Bitcoin

Bitcoin Posts Massive Overnight Rebound, But Bulls Aren’t in the Clear Yet

January 22, 2021
FindCryptoNews.com

FindCryptoNews is an online news portal that aims to provide the latest crypto news and real-time updates around the world. Feel free to get in touch with us!

Recent News

Cosmos (ATOM) Geared Towards Facilitating True Interoperability

January 23, 2021
Rick and Morty-Themed Crypto Art Sells for $290,000 on NFT Marketplace

Rick and Morty-Themed Crypto Art Sells for $290,000 on NFT Marketplace

January 23, 2021

Subscribe Now

Loading

© 2020 FindCryptoNews.com - All rights reserved!

No Result
View All Result
  • Home
  • Latest News
  • Crypto News
    • Bitcoin
    • Ethereum
    • Ripple
    • Litecoin
    • Altcoin
  • Live Cryptocurrency Prices
  • Analysis
  • Blockchain
  • Regulation
  • Trading

© 2020 FindCryptoNews.com - All rights reserved!

  • bitcoinBitcoin(BTC)$32,287.000.48%
  • ethereumEthereum(ETH)$1,249.051.77%
  • tetherTether(USDT)$1.000.04%
  • rippleXRP(XRP)$0.2729780.53%
  • cardanoCardano(ADA)$0.3498960.08%
  • litecoinLitecoin(LTC)$139.781.58%
  • bitcoin-cashBitcoin Cash(BCH)$429.80-2.09%
  • stellarStellar(XLM)$0.270124-1.32%
  • eosEOS(EOS)$2.754.28%
  • moneroMonero(XMR)$137.660.23%
  • tronTRON(TRX)$0.0291382.48%
  • nemNEM(XEM)$0.2188971.34%
  • neoNEO(NEO)$24.943.85%
  • iotaIOTA(MIOTA)$0.4593120.85%
  • dashDash(DASH)$106.761.58%
  • ethereum-classicEthereum Classic(ETC)$7.532.85%