Digital transactions, such as those conducted via online banking and unified payment interfaces, are already widespread. As technology adoption increases in the financial industry, the next big change is anticipated to occur not in the method in which payments are made, but in the instrument itself, with money moving from its current physical form to a digital format. Virtual currencies, often known as cryptocurrencies, such as bitcoin and ethereum, continue to gain popularity despite their high volatility in value, environmental worries about their carbon imprint, and ever-increasing regulatory difficulties.
The cryptocurrency ecosystem is constantly evolving; there are numerous tokens, coins, currencies, and assets available, each with a different intrinsic value. NFTs, or non-fungible tokens, are essentially types of cryptocurrency tokens that are indivisible and completely unique.
Recent articles have focused on the continuing popularity of non-fungible tokens (NFTs) as well as the eye-popping financial transactions that have made news. As a refresher, NFTs are tokenized representations of assets that may be exchanged on a blockchain, which is the digital ledger technology (DLT) that underlies cryptocurrencies such as Bitcoin and Ethereum.
Unlike Bitcoin, each NFT is a unique entity that cannot be traded for another in a one-to-one fashion. NFTs are often linked with the purchase and ownership of digital artwork because they transfer ownership of the original digital work to an investor or collector while maintaining copyright and reproduction rights for the artist. Using art prints as an example, nearly anybody may purchase an art print, but only one person can possess an original piece of art, exactly as with real artwork exhibited in a gallery or museum. Despite the fact that this seems to be a specialized use, NFTs represent a significant change in the way customers purchase and sell digital assets such as music, video game content, movies, and other types of material. Publishers, artists, and content producers may also be compensated for each NFT that is purchased via the use of smart contracts. Nonetheless, as more individuals become aware of and invest in NFTs, the blockchain technology that allows these exchanges becomes more widely available.
The advent of blockchain technology on the world stage has started to provide new avenues and possibilities to the banking and payments industries, in particular, as well as other sectors. The global financial system is experiencing a change of monumental proportions. We are witnessing widespread financial inclusion and individual financial security for the first time. According to a Global Findex survey, approximately 2.2 billion people do not have access to financial services. They are unable to use any of the services available to them because they were found ineligible to open a financial account. 2.2 billion people account for roughly one-fourth of the world’s population. To put things in perspective, that is the combined population of India and China!
Traditional banking institutions tend to exclude people from some walks of life. The emergence of cryptocurrencies, blockchain technology, and decentralized finance, on the other hand, is changing our perceptions of money and how we use it.
Almost all elements of banking, lending, and trade are now handled by centralized systems that are supervised by regulatory organizations and gatekeepers, with the exception of a few systems. The process of obtaining everything from loans and mortgages to stock and bond trading requires consumers to deal with a plethora of financial intermediaries.
Financial regulators in the United States, such as the Federal Reserve, the Securities and Exchange Commission (SEC), and Congress, have far too much power over regulations, limiting customer access to capital and financial services. Most people cannot avoid financial intermediaries such as banks, exchangers, and lenders who profit from every transaction in the financial sector.
Crypto banking, as an alternative to the current centralized financial system, empowers the general public through peer-to-peer trading while disempowering intermediaries and gatekeepers. Anyone will be able to do things like lending, borrowing, and trading that are currently done by banks, exchanges, and insurers with crypto banking.
NFTs are a great example of how Crypto banks are disrupting the industry.
NFTs and mainstream adoption
Are NFTs just a fleeting trend that banks can ignore? Many industry analysts think that the need for NFTs will continue to rise in the future. According to a recent Forbes report, $174 million has been spent on non-financial technologies since November 2017. This covers a number of noteworthy NFT sales that have contributed to the company’s increased visibility. Christie’s, for example, spent $69 million for a collection of digital artist Beeple’s non-fictional works (NFT). Meanwhile, Twitter co-founder Jack Dorsey sold his first tweet as an NFT for $2.9 million, making him the richest person in the world. A blockchain-based virtual game called CryptoKitties, which enables users to adopt, nurture, and trade virtual cats, sparked the first major frenzy, with some fetching as much as $172,000 on the open market.
Many NFT supporters value their security as well as the ability to participate in the digital shift accelerated by COVID-19.
Although the first blockchain was launched 10 years ago, the technology dates back to 1991. While its uses are still fairly new, the popularization of cryptocurrencies and NFTs are giving new prominence to Crypto Banks.
As these Crypto banks become more widely adopted and used, it is likely to have an impact on how the banking and payments industries conduct business. Specifically, crypto banks are upending the way many contemporary banks do business by substantially decreasing operating expenses while also shortening the time typically needed for different procedures to complete. Despite the inherent advantages of blockchain technology, adoption has been sluggish, perhaps owing to the current technological stacks that banks already have in place, as well as the uncertainties surrounding the future of cryptocurrency institutions (Crypto banks). Crypto banks are not an evolution of previous technologies, but rather a new way of doing business that necessitates new technology.
Crypto banks are unique in that they are owned by nobody and everyone at the same time. It is possible that cryptocurrency banks may one day offer a worldwide data infrastructure in which all users would have access to the same pool of information. For decades, bankers and technologists have been searching for a safe, single version of the truth. Blockchain has the potential to be that version of the truth. One of the initial promises of blockchain technology was that it would have the ability to serve as the basis for global recording systems. The ability to move financial data across borders in real time, securely, and effortlessly is a significant advantage for global banking and payments organizations. In terms of data, blockchain technology, by keeping client data on decentralized blocks, may reduce duplication of effort and make real-time information exchange across financial institutions simpler and more secure. Because of the inherent security of the technology, blockchain may be able to reduce the amount of time and money spent on administrative and regulatory tasks. Cryptocurrency banks have the ability to provide payment processing services that are quick (and possibly real-time). Furthermore, NFTs are functioning as a lightning rod, bringing Crypto Banks to a larger audience than they have ever been before.. This is paving the way for a new era in the purchase, sale, sharing, and distribution of digital goods and content.
How might people who aren’t currently buying or trading NFTs be affected in the future? When will they emerge from the pages of newspapers or social media and into the lives of ordinary people? Is everything digital in your life about to become an NFT?
Take into consideration everything that is digital now and has already propagated across the world wide web. In the future, when you produce anything – anything – you may pause to consider how you want to distribute it. An NFT might release a new song, a short tale, or even a funny video as part of their campaign. An NFT of a movie, book, or video game may be available for sale on a digital second-hand marketplace as an alternative to a physical copy. For the first time, non-fungible tokens (NFTs) enabled by blockchain technology are altering the way individuals think about ownership rights to their new invention. There is a distinct line drawn between banks and financial organizations that invest in contemporary technology and those who do not invest in modern technology. With the proliferation of technologies that will not only disrupt but also disinter-mediate previous technology systems, banks must ensure that they are investigating all of the efficiencies that Crypto banks can bring.
As businesses begin to offer interest-bearing accounts similar to traditional banks, the market is exploding with opportunities. Cryptocurrencies have seen a significant increase in consumer interest as a result of Crypto exchanges and Crypto Banks offering financial products that disrupt and outperform traditional banking and lending. According to estimates, 11 percent of customers between the ages of 18 and 32 utilized their stimulus cheques to make investments in cryptocurrencies like bitcoin and Ethereum. The wide range of capabilities provided by crypto banks, such as smart contracts and other DeFi products, will play a significant role in the future of finance, particularly in the area of collateral monitoring and payment tracking. Blockchain-based financial institutions are already displacing conventional financial institutions with their efficient, accessible, inclusive, and optimized Crypto Interest Accounts, which provide a smooth and trustworthy finance solution.
With the emergence of the NFT sector, we could soon see the financing of NFTs. There are some platforms that are already lending out money to a slew of users who use it to buy NFTs. On the other hand, there are platforms that are lending out their game assets, so talented gamers and users can utilize the best of the best to dominate the game and help the asset make some money.
Crypto banks and NFTs are setting the world on fire as they pave the future of finance. What do you think?