As crypto users try to understand how crypto can fit into daily lives, some interesting use in the last two years has proven that “the solutions to our everyday financial challenges might lie in cryptocurrencies and blockchain technology.”
The shutdown of financial institutions in Ukraine and the great lockdown result of COVID-19 might have been the catalyst to make investors and crypto users devise new ways of using cryptocurrencies. The Russia – Ukraine Conflict has brought to light the many uses of cryptocurrencies in instances where financial intermediaries cannot be fully relied on. To begin with, in Ukraine, their zeal for cryptocurrency has ensured that the country can receive donations. Furthermore, funds have been set up, one for humanitarian purposes and the other for military purposes. These indigenous ways have ensured that the army is fully supported in terms of Medicine, armour, and food, and at the same time, the internally displaced citizens are warm, have food, and have Medicine. The funds are received faster and appropriated to urgent needs.
Moreover, using crypto has created a “Shadow Economy”, resulting in countries such as the President of the USA signing executive orders seeking guidance on regulating cryptocurrency. All countries should emulate this move, opening discussions on how cryptocurrencies can be regulated and used in times of war and economic shutdown.
Covid-19 and Lockdown
Thirdly, due to COVID-19, the great lockdown has also helped governments and their citizens come up with indigenous ways of using cryptocurrencies and digital currencies. Most citizens have been forced to think about the future in a world where financial institutions and intermediaries are no longer working. Governments have started thinking of going digital and, as a result, are researching Central Bank Digital Currencies. Central Bank Digital Currencies are to be issued alongside physical money.
Digital coins are more efficient and safe to transact as the treasury issues them. By coming up with a Central Bank Digital Coin, the government has solved the problem of having an alternative form of currency in case of an economic shutdown or a payment method to pay for large projects not affected by inflation. During the lockdown, citizens were forced to pay for critical services via mobile money. Entrepreneurs and companies were forced to devise multiple payment methods to ensure that their customers were given options to pay for goods and services received, e.g. Starbucks and Chipotle. Having cryptocurrency as a payment option solves the problem of accessibility of money in cases where there is a breakdown in financial systems.
On the other hand, citizens who relied on traditional financial systems to safeguard their money have realised that money stored in safes and banks could become inaccessible. As a result majority of them have opened virtual wallets, invested in virtual coins, and moved their Fiat to Crypt currencies, especially in Bitcoin. Opening virtual wallets solves the problem of accessibility in cases where there are no financial systems.
Gaming and sports betting
Fourthly, gaming companies have not been left behind in rethinking their financial models and incorporating cryptocurrencies as a payment method and a way to receive and place bets. Cryptocurrencies are better than Fiat currency due to online transactions and can handle high bet limits. Betting sites have started receiving Bitcoins, Ethereum, and Cardano as payment, and more coins are being added as options. Using Crypto Currencies as opposed to Fiat solves the problem of slow transaction approval and increases the betting amounts limits.
Another sector that has not been left behind is the education sector for incorporating cryptocurrencies. In March, a school in Dubai announced that it would accept cryptocurrency as a tuition fee payment. This was aimed at giving parents options to select the method that was most convenient for them.
As a result, Dubai’s government was the first to develop laws regulating virtual assets. Cryptocurrencies have not only solved problems in accessibility and limits, but they have also ensured that the economy can continue in a world where traditional financial systems don’t exist. This will, of course, require a change of mindset of the other sectors that support the financial sector, e.g. the education sector, technology/digital industry, energy generating industry, and the governance sector.
The education sector has not only re-invented itself by coming up with new payment options but has to also think about the future without the traditional financial systems. This means that they may be forced to change the education curriculum to prepare the learners to have innovative minds, e.g. example, Kenya has to introduce coding to learners in primary schools. The energy sector also needs to audit the energy requirements if the country wants to be on Par with cryptocurrency requirements.
By carrying out an energy audit, the energy-generating companies will develop ways of generating clean power to substitute fossil energy. The digital /technological sector also has a way of coming up with a way of supporting cryptocurrency use. By providing reliable internet, incubation hubs where innovators can come up with creative designs for coins, and peer to Peer platforms that are easy to use. They can easily integrate with the available payment options and gateways. In conclusion, cryptocurrencies provide solutions to financial challenges by creating alternatives that have made work easier and financial services accessible. By introducing cryptocurrencies as payment options, companies have proven that in case of financial close-down or Lockdowns, economies of organised countries can continue.