Investors can trade using the same currency across the globe
Inflation in the global economy is undoubtedly a concern for the best of us. Prices for goods have reached an all-time high over the past four decades. Thus, consumers and investors look at other options for international trading and to protect their selling and purchasing power.
Luckily, cryptocurrency shines for international trading. For example, on the blockchain, investors can securely buy and trade using the same currency, no matter where they are in the world.
International trading is one of the most promising use cases for the blockchain. The digital currency traces product information, makes secure payments, facilities original certifications, enables real-time information sharing, and optimizes processes without transaction fees.
The transactions also simplify the long and tedious process of obtaining a Letter of Credit (LoC) needed when trading fiat internationally.
Despite crypto assets being an alternative to traditional banking infrastructures—to make centralized governments, banks, and agencies no longer soared after—more financial institutions are beginning to notice the advantages of cryptocurrencies for international trading. For instance, the investment bank Morgan Stanley recently created crypto funds for its clients to invest in.
Surpassingly, Russia’s Chairman of the State Duma Committee on Energy, Pavel Zavalny, lately announced potentially accepting Bitcoin as payment for oil and gas exports in the future. Although, only from few tight-knit countries.
Nevertheless, many central banks and countries remain cautious over the blockchain market’s volatility. Historically, the price of cryptocurrencies, especially Bitcoin, has not been stable. So, they believe the currency may not remain a good investment vehicle for international trading over time.
Digital currencies also have the tools to benefit financial institutions and their customers highly. Therefore, regulatory agencies, such as the Office of the Comptroller of the Currency (OCC), are working toward changing banks’ perception of digital currencies. The finance firm believes banks should set up custody wallets for crypto novices so that customers can secure their wallets with a trusted financial institution.
Another significant issue preventing the use of blockchain for international trading includes lengthy trading times and steep gas fees.However, thanks to Ethereum 2.0 and Layer 2 solutions, the future of blockchain has the potential to be rosy.
Subscribe to the NFT Lately newsletter to receive news covering the latest NFT drops, releases, reviews and more.