Digitization and cashless transactions have triggered the popularity of mobile app payment services and most recently Bitcoins among the young adults. These modes of payments, especially Bitcoins, are most likely to give a tough competition to the Banks and other traditional financial institutions.
Our busy schedule pushes us even more to opt for such devices and applications that will serve to ease our complex life a bit more and the answer is undoubtedly mobile phones with its en number of useful applications including e-wallets. Thus physical wallets can very well take heir place in cold storage since these methods have reduced the need to carry cashes and or debit and credit cards.
Who needs to carry bunch of notes or even a leather wallet in the digital world??
Digitization continue its task of simplifying our complex and busy scheduled lifestyle.
The cashless transaction such as the cryptocurrencies, has emerged as the latest trend in the commercial world lately and users consider it the most convenient means to conduct any of there monetary deal. Bitcoin is one such example of the latest mode of payment.
What is Bitcoin???
This digital payment system has been in existence since the year of 2009 when a group of unknown programmers released the cryptocurrency in the market as the open-source software.
The peer-to-peer exchange of money takes place directly between the sender and the receiver, eliminating the existence of any intermediary bank or body. It is, undoubtedly, the first decentralized digital currency.
Mining is a record keeping service that maintains the consistency of the public ledger(blockchain) that keep a track and maintain record of all the bitcoin transactions.
Where does ‘Bitcoin’ stands today??
We can safely say that the traditional banks and International digital money transfer companies such as Western Union, PayPal etc are facing tough competition and their very existence is about to be challenged by the cryptocurrency.
- South Korea, recently, passed a law, legalizing Bitcoins as one of the accepted mode of International money transfer from 18th July 2017 onward.
- Japan’s lawmakers gave a legal recognition to Bitcoin as well.
- More and more consumers are considering the cryptocurrency as the viable option of payment.
- Bitcoin witness 287,000 transactions per day.
- Cryptocurrency market cap hits the level of $25bn.
- A report by Reuters, reveals that South Korean retirees and many others prefer to invest in cryptocurrency
- To escape the high rate on savings, they prefer to invest in Bitcoins.
- The thriving retail culture of the Asian countries is the perfect market to popularize this mode of monetary transaction.
- May 25th witnessed the global average bitcoin price stand at $2,514.
However, there is the darker side of this picture.
What are the current issues rising with Bitcoin and Korea’s stand on them??
- There was no regulated body and fixed laws in Asia for such cryptocurrencies. International trade with digital currency increases a lot of risk. Lack of proper regulated body intensifies the fear of loss or scammed by many offenders in the market. Some of the exchanges cannot be trusted as well.
- The popularity of this method and absence of a proper legal body, gave rise to a wide range of scammers in the market and fueled the rise of multi-level marketing schemes.
- A recent report states that the Reserve Bank of India plan on ignoring this particular mode of payment for now and do not recognize all those companies, related to Bitcoin and cryptocurrency, around the world since they are not authorized or licensed.
- South Korean Government has decided to deal with the scammers strictly by imposing regulations on cryptocurrencies. The Financial Service Commission(FSC) has taken up the task of regulating any transaction that takes place using Bitcoins.
- The amended Foreign Exchange Transaction Act of South Korea enables FinTech companies to first register with the Financial Supervisory Service (FSS) to provide the service of international money transfer for small funds using several methods including that of Bitcoin as well.
- The limit to transferring money by FinTech companies, has been fixed to a maximum of $3,000 USD and annual limit at $20,000 USD.
What are the benefits of using cryptocurrencies like Bitcoin??
- The traditional method of money transfer via Banks takes a minimum of 2-3 days to complete and charge a commission fee of 5-6%
- However, the FinTech companies that carries out the monetary transaction process using Bitcoins and other cryptocurrencies charge as low as 1% commission against each money transfer and the entire process completes in just 3 minutes.
This is, undoubtedly, the best news for the consumers but can definitely steal a goodnight’s sleep from the Banks and other financial institutes. They need to quickly adapt to this new change in order to survive this market challenge.
Summing Up
A recent report stated that it is highly possible that any Bitcoins received after 31st of July 2017 may disappear into thin air or may be rejected as invalid. There are certain reasons behind this.
Refer to the reports in the links: Bitcoins may just vanish, Chain Split
However, how much the above report is true, the future course of action will gradually disclose. For now, the consumers and users are opting for this popular mode of exchanging monetary transactions and international fund transfers.
Though Indian Government, presently, did not give recognition to the cryptocurrencies, South Korea’s step can motivate all the countries, worldwide, to take a joint step towards adopting this new method of cashless transaction.
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