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How Cryptocurrencies are Revolutionizing the Traditional Financial Industry

CryptocurrencyJul 17, 2021 07:00AM ET
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How Cryptocurrencies are Revolutionizing the Traditional Financial Industry

Since the launch of cryptocurrencies over a decade ago, there have been long debates on how these new technologies will impact the world. Thanks to their underlying technology, blockchain, these digital currencies seek to pioneer a necessary shift in how users get access to capital.

Identified as disruptive technologies, cryptocurrencies and blockchain are on the verge of reshaping the traditional financial system in several ways.

How Blockchain and Cryptocurrencies are Revolutionizing the Financial Industry
According to a 2017 Business Insider article, it was revealed that over 2 billion of the world population are unbanked. Citing World Bank’s exclusive reports, the article stated that 20% of that population receive wages in cash.

The unavailability of fast and easy banking services has indirectly led to poverty as well as the inability of individuals, especially in developing countries, to start and efficiently run businesses. Additionally, the cumbersome paperwork required to access government loans and grants has all contributed to entrepreneurs’ woes.

Even when these loans are granted, the interest rates are outrageously high, making it almost impossible to pay back within the allocated time.

The advent of cryptocurrencies currently solves the “unbanked” challenge. Being digital currencies, these crypto projects offer users, regardless of location, an opportunity to seamlessly transpose and receive payments from the comfort of their homes. That's not all.

These projects also guarantee faster and cheaper transactions.

Western Union (NYSE:WU), one of the biggest payment gateways, has 4 different transfer fees senders will encounter before successfully executing a transaction. Also, depending on the channel or financial institution you're sending from, you may be charged between $9 to over $119 per transaction, bear in mind that the fee to be paid will be determined by the amount sent.

Juxtaposed with cryptocurrencies, this payment gateway is too expensive and surprisingly, not as fast as most digital currencies. Most crypto projects charge as low as $0.1 per transaction, regardless of volume. Some, on the other hand, do not charge for transactions.

The introduction of cryptocurrencies has opened up limitless opportunities for users to easily transfer and receive payments from anywhere in the world, thus solving the unbanked problem. One of such projects is the ESP Project.

The ESP Project
With an emphasis on innovation and education, this blockchain-based project like a few others attempts to pioneer a shift in payments. The launch of its native token, E$P enables users on this platform to make payments to anyone.

Leaning towards education, the ESP Project also referred to as Education Solar Project introduces a platform where teachers, students, and parents will connect. As stated by the team, this platform will put an end to the unbanked problem facing developing countries by offering them a fine opportunity to make payments for school supplies, meals, and tuition with the E$P token, an ERC-20 compliant asset.

Additionally, this nascent crypto project being a supply chain payment solution will enable users to make payments anywhere in the world, albeit at a fast and very low rate. As a decentralized finance [DeFi] project, ESP, according to the team, will offer users access to lenders worldwide, helping them borrow and lend funds in a decentralized and secure manner.

The development and launch of these projects and others like it have opened up opportunities for individuals to not only get access to capital but also seamlessly send and receive funds without filling unnecessary paperwork. Recognizing the immense benefits of cryptocurrencies and blockchain, various traditional payment gateways are looking to integrate them into their services.

Truly, cryptocurrencies and blockchain technology are changing the world for the better.

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How Cryptocurrencies are Revolutionizing the Traditional Financial Industry
 

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