2022 was probably the most difficult year for crypto. A series of high-profile collapses such as UST/Luna, and Alameda/FTX, combined with a global economic recession has shaken investor confidence in our industry. However, these were institutional failures, and do not reflect the potential of crypto as a technology. In my previous post, I discussed how crypto can disrupt the world of global remittances, and in this post, I’ll outline how crypto can disrupt financial services by delivering a more accessible, efficient, and transparent alternative.
Accessibility: Crypto financial services can allow individuals and communities that are traditionally excluded from the financial system, such as those in developing countries or those without access to traditional financial institutions, to access financial services. All that's needed is an internet connection.
Efficiency: The most important way crypto can disrupt financial services is by reducing costs and increasing efficiency through smart contracts. Smart contracts are self-executing contracts with the terms of the agreement between lender and borrower being directly written into lines of code. The code is immutable and will automatically verify and enforce all the terms of the agreement. This removes a litany of legal expenses and resources required to ensure the agreement terms are adhered to.
Transparency: Crypto financial services can be more transparent because they are stored on a blockchain and can be verified by anyone.
Overall, crypto has the potential to bring significant changes to the financial industry. Despite the setbacks of some companies this year, the issues crypto has the potential to solve still remain. At CoinMENA, our goal is to become a leader in financial services, built on crypto rails. The first phase of our mission was to provide seamless fiat to crypto on-ramp/off-ramp services.
It has been a challenging year for crypto, but a calm sea never made a strong sailor.