12 years ago, the first and most famous cryptocurrency burst onto the scene -- Bitcoin. Since then, more than 2,000 types of crypto coins have been registered on the market, and new cryptos are constantly appearing on the market.
Which crypto project will be the most profitable this year? Only after doing some thorough research on crypto trading will you get a clear answer. Because of crypto’s complexity and burgeoning popularity, the cryptocurrency market is attracting more and more players: those who are intrigued by novelty, lucrative opportunities and transaction anonymity.
Governments are wary about crypto coin circulation, and not without reason. Despite progressive technologies, crypto coins pose a threat to traditional economic and financial systems. Bitcoins and altcoins are based on the decentralisation principle and are not issued by a central bank, which means they are not regulated. As a result, legally unprotected investors often fall prey to fraud. Cryptocurrencies are also extremely unstable, which poses risks for financial institutions when buying crypto coins with credit cards due to an insufficient amount on the account for repayment.
With cryptocurrency as a growing financial trend, regulators need to resolve the issue of crypto’s legal status. Each country chooses its own path - some recognize crypto as a financial asset, others as a commodity or means of payment. Some regulating bodies make crypto coins available for commercial circulation, and some make them available only for individuals.
Many countries have introduced strict rules for working with cryptocurrencies, which banks and exchanges should follow to legally conduct transactions for crypto asset sale and exchange. Some banks have even opened cryptocurrency departments to develop cryptocurrency ATMs and actively invest in exchanges.
SOLAR PAYMENT HUB SERVES AS A BRIDGE BETWEEN THE CRYPTO WORLD AND THE TRADITIONAL BANKING INFRASTRUCTURE FOR PROCESSING FIAT PAYMENTS. SOLAR PAYMENT HUB SUPPORTS THE EXISTING PROTOCOLS OF BANKING INFORMATION EXCHANGE, AND WHEN INTEGRATED WITH CRYPTO PLATFORMS, ALLOWS REAL-TIME PURCHASE, SALE, AND EXCHANGE OF CRYPTOCURRENCIES AT A DYNAMIC RATE. TRANSACTIONS CROSS ACCOUNTING BETWEEN THE BLOCKCHAIN AND CORE BANKING SYSTEMS
In many countries, there are discussions about issuing national digital coins under central bank supervision. However, if the regulator acts as an issuer, the role of commercial banks as intermediaries in the financial system will be partly lost. On one hand, countries will be able to solve the problems that come with physical cash (its storage, production and fight against counterfeit banknotes, for example). But will a financial system without an intermediary be sufficient to tackle crypto’s challenges? Cryptocurrencies still are not able to ensure transaction speed corresponding to the usual payments -- clearing takes more time. We can’t underestimate cryptocurrencies’ controversial reputation and operations complexity, or the influence of a potential credit resources decrease due to the transfer of non-cash money into digital currency.
Despite the gray areas that still remain, crypto coins have already been legalized in many countries. But until recently, there were no full-fledged, digital alternatives to conventional (fiat) currency. Now, El Salvador has legalised Bitcoin as a means of payment. Cryptocurrency will be used alongside the U.S. dollar, and businesses will be required to accept Bitcoin as a means of payment for their goods and services. Crypto coins can be bought, sold, donated and bequeathed. Citizens will even be able to pay taxes with Bitcoin.
El Salvador's economy relies heavily on remittances from abroad, as many indigenous people work in other countries and regularly send money home. The use of Bitcoin is intended to facilitate cross-border transfers. In order to popularize the cryptocurrency, El Salvador’s president Nayib Bukele even promised every citizen who registers in state-owned Chivo Bitcoin wallet to pay $30 worth of cryptocurrency.
But the simplicity of transfers applies only for operations within the system. In the case of cash out, the commission for the withdrawal of assets, which is taken by exchangers and exchanges, can reach 2 — 5% of an exchanged amount. Furthermore, the legalisation of Bitcoin also threatens complications in the fight against the underground economy and the financing of terrorism.
NEVERTHELESS, THE INTRODUCTION OF BITCOIN AS AN OFFICIAL CURRENCY AND THE APPROPRIATE FINANCIAL ECOSYSTEM CONSTRUCTION IN THE COUNTRY IS AN IMPORTANT HISTORICAL CASE FOR THE FINANCIAL WORLD