The developments in the world of crypto assets in recent months show how drastically the perspective has changed in 10 years.
Bitcoin was born as a revolt against the central oligarchy of the financial system. Anarchism was in his nature. In this respect, for a long time, states and traditional structures first remained at the center of threat and then cautiousness. A decentralized system might be more resistant to the “recycle if you can’t destroy it” approach, but it was inevitable to adapt. Exactly what happened recently proves this.
The Office of the Comptroller of the Currency (OCC) made a very interesting statement last week. According to the statement of OCC, the largest bank supervisory agency in the USA, banks in the USA will be able to provide stable coin services within the current financial system, using public blockchain networks.
This statement fell like a bombshell to the community that showed interest in crypto financial assets and followed them closely. Not in a bad way, but in a good way, as it was interpreted as a counter to the U.S. Securities and Exchange Commission’s (SEC) appetite for gradually increasing regulation of cryptoassets and related services, the brokerage firms and technical infrastructures that provide these services. However, that is not the case at all. First of all, what does the name of OCC mean technically, we need to explain it a little bit. With the permission granted, banks will now be able to create an alternative to SWIFT and similar money transfer systems by using fixed coins in blockchain networks.
Again, the transformation of fixed coins into services through the banking system paves the way for many services such as real estate investment partnerships and share-based fund systems to be integrated into the banking system. The biggest reason behind this step; To take a step that can bring the US banking system, which has had difficulties in technical innovation for many years and which is no different from a caricature, especially when compared to Chinese companies, to be innovative and put it into the global game again. Undoubtedly,
it will take some time to see the fruits of this. However, the recent statements of the SEC do not change the fact that these developments should be within certain limits. Components such as Know Your Customer (KYC) and Anti Money Laundering (AML), which are at the core of the global banking system, will of course continue to exist and aim to destroy the restrictive and single-centered structure of the traditional financial system that has increased with the emergence of Bitcoin. anarchist ideas will remain as writing on paper.
Bitcoin is in the focus of developments
The rapid appreciation of Bitcoin in recent months is different from the activity we saw in 2017. Bitcoin is gaining more and more unofficial legal status as corporate companies withdraw Bitcoin from the market as a capital component and Paypal offers crypto wallet services. It was a sentence like paradox, but what I want to express is this; Bitcoin does not replace the system, the system encompasses Bitcoin. We are on the verge of providing legal status crypto wallet services to banks and licensed institutions. I’m talking about a global step, not single structures.
This will answer the need for KYC, which is one of the most important elements. Disallowing transactions to or from wallets that are not paired with an ID are likely to be secondary (or simultaneous) regulation within the traditional financial system. Bitcoin and possibly other crypto assets will automatically integrate into the global AML system after these very basic regulations.
My personal opinion is that there will be statements from central banks that they will start to hold Bitcoin as a reserve like gold in the future. Perhaps, behind closed doors, this process has already begun. Token-based technologies will continue to exist subject to the regulations of the SEC and similar structures. What will be the fate of decentralized finance (DeFi) applications in these developments? Will the governance structure of the Ethereum blockchain network, which provides the largest infrastructure in terms of DeFi, be able to stand up to regulations, which is quite opposite to the philosophy of this business? I can’t take any chances.
Of course, networks that go under the ladder, completely anonymous and give importance to privacy, will continue to exist. However, the value created on regulated systems will grow so much (definitely not an investment advice, but big banks’ predictions of hundreds of thousands of dollars for Bitcoin by the end of 2021 should not be in vain) that consumers will prefer to use these products within the traditional financial system instead of going under the ladder.
End of Story
The crypto-order process has already begun. Bitcoin is on its way to being integrated into more and more traditional systems. These are certainly not bad developments. Moving and innovative days await the financial world. It is my hope that this transformation will not be limited to the financial world and will extend to other sectors as well. “Integration” instead of “Disruptive Innovation” will more heavily but effectively transform the mindset and I don’t know if we will live to see, but ultimately, if humanity does not destroy itself before, blockchain philosophy will truly be one of the main components that define the future of humanity.
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