In the fourth quarter of 2020, PayPal saw considerable growth in its number of transactions (36%), about 277,000 million dollars. The surge started in the third quarter of 2020, right after the company introduced cryptocurrency transactions.
The traditional financial system needs to adapt to new technologies. According to the Cambridge Center for Choice Finance, the number of cryptocurrency users is increasing rapidly; it has tripled from 35 million people in 2018 to 101 million in the third quarter of 2020.
Another study from the Financial Conduct Authority of the United Kingdom revealed a 78% growth since 2019.
The most relevant Cryptocurrency trading feature is its is profitability. In the fourth quarter of 2020, PayPal surpassed its number of transactions by 36%, about 277,000 million dollars. The surge reached such a stage in the middle of 2020 when the company launched the availability of cryptocurrency transactions.
On the other hand, China was the first to promote its electronic yuan thesis, dubbed the Digital Currency Electronic Term or DCEP. China is focused on infrastructure because several local banks have already developed or are working with their electronic wallets.
The Chinese electronic yuan is the best, if not the only example of parné electronic from central banks that currently work.
More than 60 Central Banks Worldwide are Increasing their Interest in this Matter
It is essential to consider that more than 60 central banks worldwide are increasing their interest in the cryptocurrencies. DCEP focuses on centralized blockchain technology, managed entirely by the Central Strip of China. This technology permits a complete handle of every single financial transaction, increases the collection of taxes, and avoids criminal economic behavior.
Other prominent players in this game are the international payments system Visa which recently moved its pieces to launch a protocol for offline transactions with central band digital currencies.
This protocol aims at the enrichment and acceptance of offline payments by merely downloading an app. CBDCs then essentially replace the cash parné, which means a growth in the transactions under issuer and other financial intermediary’s control.
The Creation of a Multi-format Finance and Crypto User’s Experience
The multi-format monetary situation might be turning into a requirement for many financial instruments in the environment. Banks will find the need to ensure such a fiat.
The creation of a multi-format finance possibility needs some requirements. One of them is a unified approach to compliance if each service performs anti-money laundering checks for CBDC and cryptocurrency transactions following its policy.
The crowd of outers (people who don’t share any involvement with the crypto world) may think that digital assets cannot integrate into traditional business processes.
But this is a thought far from being a reasonable truth. Crypto user’s experience assures that it is necessary to develop a unified approach to compliance; the same goes for traditional fiat and crypto.
By: Jenson Nuñez