On January 13, 2021, the US Office of the Comptroller of the Currency (OCC) announced that it had given conditional approval to Anchorage Trust Company, a chartered trust firm, to become Anchorage Digital Bank. This has made Anchorage the first cryptocurrency services provider to have received the national bank charter in the United States. The company was quick to announce that it intended to launch innovative digital currency-based financial products in the near future.
Such recognition for the use cases of cryptocurrency in the financial sector has been pouring in over the past couple of years. In 2019, Visa, in partnership with Coinbase, released a debit card backed by cryptocurrency, which lets users convert digital currency into fiat currency to make payments. In 2020, JPMorgan and PayPal joined in, to permit crypto-based payments on their platforms.
Institutional acceptance of cryptocurrencies has also come in the form of an explosion of DeFi projects. DeFi or Decentralised Finance refers to financial products that are created on a decentralised network, not controlled by any large corporation or government. It is being viewed as a worldwide move to open financial systems. These projects have also received an endorsement from large financial institutions. On December 1, 2020, Visa announced that it had entered into a partnership with BlockFi, a DeFi startup, to offer credit cards that would reward users in Bitcoin.
So, the question is no longer whether blockchain and cryptocurrencies can disrupt the financial sector, but when and how.
“The financial services sector has already made significant investments in decentralised applications to overcome challenges such as security breaches, transaction delays, collateral costs and transparency. The decentralisation, immutability and transparency that cryptocurrencies offer will be the way forward,” states Jean-Yves Sireau, Founder and Chief Executive Officer, Deriv.
The traditional banking sector, consisting of centralised institutions, has long been plagued by problems typical of such centralised networks. Cumbersome regulatory environments or the huge fees customers have to Deriv.com is an online trading service provider offering a comprehensive suite of products with flexible pricing, where its customers can trade currencies, indices, commodities, and volatility indices 24/7. Committed to customer satisfaction and high ethical standards, the company delivers quality products and services with integrity.
Published at Wed, 27 Jan 2021 09:00:40 +0000