Cryptocurrencies are becoming mainstream
It is finally happening; mainstream financial institutions like JP Morgan and Citibank are adopting cryptocurrencies and blockchain technologies. The bank leading the way is JP Morgan Chase with the JPM Coin; it marks the first time that an international bank has issued out its cryptocurrencies. Trails begin next month, and the coins will be redeemable for US Dollars.
Big banks have taken up this technology for one reason, to provide their clients with the ability to make international live payments. Over the next decade, we could see blockchain technology replace the current way global funds are transferred between banks. It was only a few weeks later that the IMF & World Bank revealed their private blockchain service “Learning Coin”. Facebook is also developing its crypto coin that will work on all messaging platforms owned by the social giant.
Furthermore, there are government authorities like the United States and Russia that are looking to launch their state-protected cryptocurrencies. The culmination of significant companies, global banks and governments all looking to jump into the cryptocurrency race shows that the market is becoming mainstream globally.
The Difficulties Ahead
Just as with any new technology that is becoming mainstream, some people threaten its advancement. For Cryptocurrency, it is “Tumblers”, people who hide their identity online and conduct fraudulent activities in the crypto space. These aren’t average traders but instead terrorist cells in the Middle East and North Korea. It was only last month that the United Nations accused North Korea of stealing $571 Million US Dollars. These combined concerns have caused the slow development of all the crypto coins coming. There is a chance that some supporters, like Facebook, could stop the development stage if they find it to be too unsafe for customers.
There is another factor that has been causing for the slow growth of the blockchain industry for mainstream companies, global banks or worldwide governments. That factor is that laws about cryptocurrencies, trading and security change from country to country. This creates confusion for any company, as some exchanges let traders sell coins amongst one another and others require there to be a middle man. However, there is now the Financial Actions Task Force, which has been built to create a standard setting for cryptocurrencies on a global scale. They will work on regulatory issues and the global standards for blockchain technologies as well.
Furthermore, there have been new rules and regulations being announced by governments across the globe. Japan has enacted a law which caps the amount that investors can borrow from cryptocurrency exchanges. Other countries like Germany, Canada, Mexico and the United States are also looking to create new legislation on cryptocurrency and blockchain technologies. These moves are welcome but don’t help traders on a global scale. These countries need to work side by side with the United Nations to create legislation that applies to traders across the world.
However, as these issues are resolved by the world’s governments and by the Financial Actions Task Force, the Wild West nature of Cryptocurrency and blockchain markets will disappear. These markets will become mainstream and start to influence the world’s economy dramatically. This will only be beneficial for traders and investors as time moves forward.