The financial world has seen multiple ups and downs in the past but a second global recession threat in 12 years has set the sights firmly on the future. As the coronavirus spreads, multiple countries began providing stimulus packages to boost their lockdown affected economies.
The United States has the largest pool of coronavirus positive patients with the country reeling from a pandemic as well as an unemployment crisis. The financial situation in the US mainland became worse when banks failed to cope with the increased demands generated by national economic stimulus bills.
Reports from within the financial sphere showed that multiple banks faced outages during trading hours. US Bank, PNC and Fifth Third Banks all witnessed their servers crashing due to an inability to handle the inflow of large stimulus funds. The issues within the industry were not just restricted to brick and mortar institutions but online repositories as well. Cryptocurrency evangelists have taken this opportunity to point out the lack of opportunity to scale, a sector that Bitcoin dominates.
Although the cryptocurrency market was still coming out of a bear crunch, its supporters were confident of its ability to recover. Bitcoin, the largest and arguably the most popular cryptocurrency in the market saw a rise this week that took its value above the $7000 mark. At press time, Bitcoin was trading for $$7108 with a total market cap of $130.3 billion. A weekly hike of 3 percent had elevated Bitcoin’s 24-hour market volume to $36.01 billion.
Many officials in the digital asset industry opined that the government’s move to keep printing move was utterly worthless. Alex Mashinsky, the CEO and founder of Celcius Network pointed out that governments do not realize how hard it is to scale. The government is still printing physical checks and sending it to people by mail and that is just not going to work, he said. Mashinsky added:
“They could do that [use blockchain technology instead]. So it’s not a technological issue. But, you know, when there’s friction, the banks make huge fees. When you eliminate friction with the blockchain, then the banks would have to charge less, not more.”
Mashinsky reiterated that the government had the chance to use blockchain technology in JPMCoin or Libra. Even while receiving flak from regulators, blockchain technology was being used to facilitate help during the time of coronavirus. Several applications have been launched based on blockchain technology, mainly acting as channels between COVID-19 hotspots and essential item delivery services.
The mainstream financial world has somewhat begun accepting decentralized technology, albeit in very concentrated areas. Governments across the world would do well if regulators looked at the cryptocurrency industry with an open mind as several exciting opportunities await in the pipeline.