Cryptocurrency and blockchain technology are often seen as disruptive forces in the world of finance. And while there is no doubt that they have the potential to change the way we do business, there is also a growing realization that they can be complementary technologies. In other words, cryptocurrency and blockchain can work with traditional fintech to create a new financial landscape.
Currently, there are a few important limitations to FinTech technologies. However, there are hundreds of Web3 companies on the rise. And with so many people looking for ways to utilize cryptocurrency, it’s only a matter of time before further solutions are created.
This article will explore how outdated financial technology can be replaced with newer systems and technologies like cryptocurrencies and blockchain. So, let’s jump into the article to see how you can benefit from this evolving combo industry.
The state of blockchain technology
The blockchain industry is expected to reach $67 billion by 2027. Currently, the size of the market hovers around the $7 billion mark. These two figures show a rise in the popularity and implementation of blockchain technology in various use cases.
Similarly, the cryptocurrency industry is also on an upwards trend, despite the current bear market. During this crypto winter, trading volume on average per day hasn’t consistently fallen below $60-100 billion.
The combination of these two industries has led to the rise of decentralized finance (DeFi). DeFi is an umbrella term that describes the shift from traditional centralized financial systems to decentralized, peer-to-peer finance built on Ethereum and other blockchain-based technologies.
How do we bridge the gap between crypto and fintech?
To bridge the gap between crypto and fintech, we need to look at how each industry can benefit from the other. So, let’s start with fintech.
Fintech relies heavily on centralized systems, such as banks and other financial institutions. This reliance limits the capabilities of fintech companies. For instance, if a bank decides to cut off access to its API, then the fintech company that was using that API will no longer be able to offer its services.
Cryptocurrency and blockchain technology can solve this problem by offering decentralized alternatives to centralized systems. For example, instead of relying on a bank’s API, a fintech company could use a decentralized exchange like 0x to connect with its users.
Another company evolving in the industry right now is SG Veteris. The London-based company aims to bridge the gap between crypto and fintech. They’ve created Koinal, a platform that allows users to buy, sell, deposit, and withdraw cryptocurrency. The platform enables instant transactions and is available in over 150 countries. Lastly, SG Veteris allows institutions the ability to trade high volumes of crypto via OTC trading.
Additionally, fintech can benefit from the speed and efficiency of cryptocurrency transactions. Cryptocurrency transactions are fast and efficient. They can be completed in a matter of seconds, a significant advantage over traditional fiat currency transfers that can take days or weeks.
The future of crypto and fintech
The crypto and fintech industries are growing at a rapid pace. They’re both expected to reach new heights in the coming years. And as they continue to grow, the two industries will become more intertwined.
We can expect to see more companies accepting cryptocurrency as payment, using third-party platforms such as Bitpace. These can easily be plugged into existing systems and customized so they look like a seamless part of the site. We’ll also see more companies using blockchain technology to power their services. Combining these two industries will create new opportunities for businesses and users alike.
Another fascinating component of crypto’s future is its use in underdeveloped countries. Crypto wallets could be precious resources in places where bank accounts aren’t as ubiquitous as they are in Great Britain or the United States.
Typically, the local currency isn’t always stable in underdeveloped countries, either. So, crypto could act as a form of hedging against inflation in those markets.
Dollars and sense
As we can see, there are many ways in which crypto and fintech can complement each other. Blockchain technology is on the rise. It is fast, secure, and censorship-resistant. We can get the best of both worlds by combining the crypto and fintech industries. As the two merge, we can create new opportunities and help solve existing problems.