Cryptocurrencies in Banking Discussion is Heating Up
Written by Robert Reynolds on July 29, 2020
It’s no secret that banks and cryptocurrency have struggled to see eye-to-eye in the United States. If you have been watching this conversation, you would have viewed a letter from the Office of the Comptroller of the Currency (OCC) recently that introduces a new narrative to the discussion. They stated, “Government-issued currencies, including the U.S. dollar following abandonment of the gold standard, are traditional fiat money. Some types of cryptocurrencies may have similar characteristics as fiat money.”
They also acknowledged that financial markets are pushing forward in digitizing, increasing the need for banks and other service providers to embrace new technology and explore innovative ways to serve their customers’ needs. We support and agree with the OCC’s position that “national banks may provide permissible banking services to any lawful business they choose, including cryptocurrency businesses, so long as they effectively manage the risks and comply with applicable law.”
Following other news around the crypto world, we also found a developing proposal that would allow users to store and transfer money digitally for free. The bill proposed in New York by a group of politicians offers an Inclusive Value Ledger (IVL). Under this plan, individuals and businesses could be issued digital wallets within the state of New York. This bill seems to be targeting public banking for the millions of people who have limited access to bank accounts or come from low incomes and would shift availability in New York to transact using a statewide, public digital currency.
A developing momentum we have also witness is how cryptocurrency and blockchain have continued to come in focus as public crises emerge from the COVID-19 pandemic. Blockchain is connecting nations and is already being used in Asia to track coronavirus-related financial relief to businesses and individuals. The insurance industry also is reportedly adapting and leveraging it to fast track claims payouts. This technology’s capabilities are only starting to show their power to track, log, and securely share sensitive financial information. One could also predict that the government will leverage blockchain systems to watch other critical data to get ahead of the global spread of the virus. We believe many entities will lean into blockchain as a method to ensure data accuracy and promote transparency, especially in response to the coronavirus crisis and future global events.
The Numuni Outlook
We believe 2020 will be an exciting growth period in crypto-asset adoption. The key components for what crypto can be will come from how value is stored and transferred around the world, continued efforts in optimizing energy consumption, and the introduction of new regulations to tackle large-scale conversations. We forecast a reduction in impacts associated with global transactions where reliance on government-issued money has been costly and time-consuming.
Numuni predicts this will all positively impact financial stability and a balance with new and old industries by adjusting taxes, finances, and consumer security. We anticipate this technology’s innovation will adopt global public attraction, synergy among the banking and money landscape, and increasing the overall adaptation of crypto while using Numuni as a means for hundreds of millions of people to pay for digital content.