The global financial system has witnessed the rising popularity of cryptocurrency. As a result, it is becoming more than apparent that the fintech industry can benefit significantly by adopting this digital currency. While the market still experiences relative volatility, the world cannot completely ignore the broad adoption of popular cryptocurrencies like Bitcoin, Ethereum, and others.
Why Fintech Should Adopt Crypto
By Sidney C. | 10-20-2022
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In Conclusion
Whether it’s simplifying cross-border transactions or using private keys and seed phrases to prevent fraud, there is more to expect from cryptocurrency, and a fusion of fintech and crypto can certainly benefit the global financial system.
Facilitates cross-border transactions
Understanding fintech
Fintech--or “financial technology”-- refers to technologies used to facilitate financial transactions. It is an ever-growing industry with exceptional growth forecasts. In 2020, the market was estimated to be worth more than $110 billion and is projected to reach over $698 billion in the next 10 years. The adoption of fintech has transformed the financial system in many countries.
Cross-border transactions play an essential role in the current fintech system. However, while there are options available for performing these types of transactions, they nonetheless remain cumbersome and inefficient.
One of the numerous benefits of crypto is its ability to facilitate cross-border transactions within seconds. This is a big advantage over alternative methods like PayPal, Payoneer or Wise Transfer, which require 3-5 working days to complete similar tasks.
Reduces financial fraud
Fraudulent activities, like hacking accounts, are prevalent in fintech. If a password is compromised, hackers can gain access to a user’s mobile app, change the pin and transfer all the person’s money. This scenario plays out on a regular basis.
On the other hand, adopting cryptocurrency can prevent easy theft since security is guaranteed by the use of seed phrases and private keys. Moreover, using private keys and seed phrases eliminates stealthy access to a person’s crypto wallet. Hence, adopting a similar system may help banks and other financial institutions prevent ongoing fraud.
Fintech use of crypto
Earlier in 2022, PayPal, one of the global fintech systems, announced that it will now accept cryptocurrency transactions on its platforms in several countries. This allows for the deposit and withdrawal of cryptocurrency, and the conversion of cryptos to fiat currency. Similarly, Revolt was allowed to offer crypto services in the United Kingdom.
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