Cryptocurrency : Transformative
or Disruptive
Ever since Bitcoin came into existence in 2008, crypto-currency has
been a household word, but what is crypto-currency really? Broadly
defined, crypto currency is a digital or a virtual asset that uses
advanced encryption techniques and operates on a decentralized
platform. Every valid transaction is added to a public ledger in the
form of a new block in a blockchain. It essentially copied onto 100s of
computers worldwide and everyone sees the same things, making it
really hard to manipulate and hack into. But at the same time its
pseudo- anonymous nature creates challenges for law enforcement
to track and stop funding of illegal activities like terrorism.
Let is look at the economic implications of crypto-currency. National
banks control the national currencies by printing and managing
inflation. But crypto doesn’t answer to them. If people begin to save
and transact in crypto, central banks loose control over their
monetary policies. Such implications weaken a country’s ability to
respond to crises and undermines currency stability. Decentralized
Finance (DeFi) uses smart contracts to create banking services—like
loans, savings, trading—without banks. One can earn interest,
borrow, or trade peer-to-peer, with no middlemen. This threatens
traditional banking revenue and challenges global financial
regulation. However, crypto can also give access to financial tools to
those without a bank account. Over 1.4 billion adults are unbanked
globally (World Bank, 2023). Crypto wallets let them send, save, and
invest money easily. It could accelerate financial inclusion in
developing countries.
In conclusion, cryptocurrency represents one of the most
transformative technological innovations of the 21st century. Its
impact spans economic realms, affecting global trade, financial
inclusion, and even altering the nature of state-citizen interactions.
