Impact of Cryptocurrency in the Growth of Economy
June 14, 2019
Cryptocurrencies have become a new trend in the world of investment for its reasonable benefits. Generally, Cryptocurrency is digital or virtual money that takes the form of tokens or coins and specially designed to work as a medium of exchange.
The process of permitting customers to trade Cryptocurrencies for the other assets is termed as the Cryptocurrency Exchange in the global market. The main objective of Cryptocurrencies is to act as an excellent alternative for the present forms of money and enabling the secure transaction. Since inception Cryptocurrency has a huge impact on the developing economy and here is the detailed information about that.
Influence of Cryptocurrency on the Economy
Most of the Cryptocurrencies are decentralized systems created based on blockchain technology. Bitcoin is the first and foremost blockchain-based Cryptocurrency. The Bitcoin Exchange is trading of good and service with the help of bitcoins. The decentralized money paves the way for easy and secure financial transaction in terms of international money. Hence, it is necessary to consider the impact of crypto on the economy.
Impact on U.S Dollar
U.S dollar is an internationally accepted currency or reserve currency of the global economy. This makes the United States maintain dominance in the global bank with the status of the dollar. It is found that any form of Cryptocurrency has no recourse to any other currencies. This has created a great change in international trade, international relations, and diplomacy.
No Middleman Activities
Usually, the central banks or SWIFT (Society for Worldwide Interbank Financial Telecommunication) works as a middleman for the international money transfer system. This kind of transactional process consumes more time and money.
In such a case, the emergence of Cryptocurrency Exchange Platform enables the users to have fast and secure transactions with its cryptographic rules. And so there is no need for the intermediaries for verifying transactions in the Cryptocurrency.
Inflation of Prices
The acceptance of Cryptocurrency in a country is characterized by maximum supply and unfixed coin supply that should correlate with economic growth. Else the economy may face price inflation or deflation. The best part of Cryptocurrency is that you exchange the currencies from one form to another. For instance, you can exchange Bitcoin To Moenro based on your requirements.
At the early stage of Cryptocurrency implementation, the finance sector, middleman business, and other service providers will lose their jobs. This is because; there is no needs for professions like a bank, lawyers, suppliers, etc. Don’t panic as it will be a temporary change. The blockchain technology creates more job opportunities and individuals can retrain it.
Increased Transactional Cost
When you compare the transactional cost of cash and the Cryptocurrency obviously fiat wins the game. The lower transactional cost leads to economic growth with more profits and benefits. Understand the transaction cost of Cryptocurrency will be high until the complete implementation of blockchain.
The increasing transactional cost leads to de-monopolization that bring a beneficial impact on the efficiency of the economy. Also, it maximizes the enterprise growth cost and third parties involvement. This will be a great opportunity for small and medium enterprises. Online Bitcoin Exchange had provoked enthusiasm and fascination in the Cryptocurrency industry.
High Demand for New Products
Since Cryptocurrency causes temporal unemployment problems the blockchain technology provide new jobs. The demand for the new products in all industry requires more manpower support which is the main reason for more employment in the blockchain.
Thus, these are the major impacts of Cryptocurrency in the growth of the economy. Till now, Cryptocurrencies offer a plethora of solution for the financial industry to eliminate the mistakes that led to the downfall of the economy. With the continual development of technology, Cryptocurrency is ready to make a revolutionary change in the global economy.