When Satoshi Nakamoto unveiled the Bitcoin white paper over a decade ago, it was difficult to predict the role of cryptocurrency in global finance. Some say that the discovery of blockchain technology is identical to the internet’s inception in the 1980s, which sparked a revolution. Starting as a niche space for tech enthusiasts, Bitcoin has become a serious participant in the financial field in just 12 years, with its market valuation closing in on Google, one of the world’s largest tech giants.
One reason for this growing popularity and interest of people is the fact that the technology that forms the backbone of cryptocurrency promises greater financial inclusion compared to traditional finance. This is especially important for developing countries and emerging markets with fast-growing economic potential. These are the regions with the most promising prospect for mass crypto adoption.
While blockchain cannot solve every problem of our society, the factors causing financial exclusion should be addressed by the community behind this industry. As the crypto industry is community-driven and decentralized in its origin which includes women’s contributions and the LGBTQ+ community, are indeed high priority areas.
The infamous reputation of the Silk Road saga and the ICO craze back in 2017, where 80 percent of initial coin offerings ended up being scams, still plagues the general public discourse of cryptocurrency. Meanwhile, by appealing to younger generations, who will soon be the major role players of global economic growth, cryptocurrency is drastically gaining traction. PayPal the world’s largest payment processor, also announced last year that its customers would be able to buy, sell, and hold cryptocurrencies which led to demand becoming far greater than the company anticipated.
Also last year, the world witnessed the rise of the decentralized finance industry, in short DeFi, which people argue, will complete what Bitcoin started, proving to be the guarantee of a better, more liberated future. It is an umbrella term for a variety of financial applications in cryptocurrency or blockchain geared toward disrupting financial intermediaries. DeFi has evolved into a symptom of the true shift from centralized to decentralized services, resulting in massive innovation and growth in Web 3.0 protocols, as well as demand for a decentralized internet. DeFi signifies a paradigm shift, promising not only the democratization of money but also the democratization of finance, causing a significant shift in how people will bank in the future.
The crypto industry is not and will never be a local trend because of its decentralized nature, and the changes it brings to the financial landscape are global. With governments around the world researching central bank digital currencies or CBDCs, more and more institutional players like MicroStrategy, Mastercard, Bank of New York Mellon, Tesla, and others are entering this space. Hence, the global economy has to accept that crypto, and the technology behind it is here to stay. These examples are also clear indicators of the industry’s maturation.
On the other hand, not all countries treat cryptocurrency the same way: India has had a tense relationship with cryptocurrency for some time; China is leading CBDC development; the European Commission has proposed its Markets in Crypto Assets Regulation, which has raised concerns within the crypto industry; and in the US, while the crypto space is hopeful about new appointments in President Joe Biden’s administration, regulators are tightening their grip.
The promise of cryptocurrency is that it will make money and payments universally accessible to anyone, anywhere in the world. Just imagine a global and open alternative to every financial service you currently use. Savings, loans, trading, insurance, etc. will be available to anyone with a smartphone and an internet connection anywhere in the world.