Insuranceciooutlook

Cryptocurrency Exchanges: One Step Deeper into Digital Transaction

By Insurance CIO Outlook | Wednesday, November 21, 2018

Blockchain technology has suffered from tougher times in defining the concept of cryptocurrency and its underpinnings. Its evolution has provided both advantages, and poses certain threats to the financial sector in payment issues, insurance sectors, and even governments.

Cryptocurrency is a type of digital currency generated through the means of the cryptographic code-based control unit, which monitors the real-time currency generation, and verification of financial transactions. The account maintenance can be carried out in a distributed ledger format, where secure transactions can be achieved without a change in the order of transactions.

Numerous government sectors back cryptocurrencies due to its tremendous advantage over FIAT currencies. Furthermore, cryptocurrencies processed at centralized control systems can generate currencies on their will, which may lead to inflation. Moreover, the massive amount already passing through the hands of individuals on a daily basis can lead to substantial economic and financial losses to the government sector.

Perhaps, the most common threat observed through blockchain-enabled digital currencies will be in terms of undermining the authority of government and financial systems, and deprivation of control and enforce mentality. Meanwhile, the cryptocurrencies integrate with the blockchain technology to overcome the limitations that arise in traditional banking process in its entirety.

However, with counterproductive measures to ignore the cryptocurrencies, certain government and communication sectors have provided unique approaches to enable blockchain and cryptocurrencies for the benefit of the global economy and humanity. Many organizations are still averse to the idea of deploying blockchain technology in their business sector. However, countries such as China, Netherland, and Russia constantly approaching towards latest technology have shown their interest in cryptocurrencies. The progressive results of blockchain are still unknown. 

The deployment of cryptocurrencies in central banks may suffer from standardization and universal acceptance due to their unknown results in the overall stability of digital money along with privacy, fraud, and cyber attacks. In the future, it is clear that the government will come up with standard policies to ascertain the deployment of blockchain and cryptocurrency in financial sectors. In spite of unrealistic results, the start-up companies such as Opporty, BlockCAT have already deployed blockchain with cryptocurrency transactions, and with standardized policies can enhance the process of doing efficient business with smart contracts.

Read Also

Blockchain CIO Perspective

Blockchain CIO Perspective

Mary Kotch, EVP and Global CIO, Underwriter, Validus Reinsurance
The Impeccable Benefits of Blockchain to Insurance

The Impeccable Benefits of Blockchain to Insurance

Mary Kotch, EVP and Global CIO, Validus Insurance
A Closer Look at Block Chain Technology

A Closer Look at Block Chain Technology

John Shea, CIO, Eaton Vance
Embrace the Changing Financial World

Embrace the Changing Financial World

Bradley Peterson, EVP & CIO, NASDAQ

New Editions