Let us know the importance of Blockchain and how can it disrupt and displace the current monetary and financial system. For that we need to understand the history of our currency and financial system. What is the relationship between currency and wealth?
Then we look at 3 key aspects (money form, money issuance, and the flow of money) of our monetary and financial system where Blockchain Technology may have a significant impact. We believe blockchain will eventually bring about the best form of freedom that is most desirable of any monetary and financial system.
Earlier it was the barter system for money exchange and trade. If any commodity is purchased and exchanged we use barter system instead of money. Traditionally gold was exchanged for commodity in terms of ownership. Now the concept of money, payments, settlement, or currency has come into business. Today’s banking system is very complicated and not much user friendly because we don’t know when and how the bank deducts money and charges on transactions we do. We also don’t know what are the policies and guidelines the banks have in terms of money transfer, debit and credit. This had aroused a lot of chaos and confusion among people, that’s where the Blockchain system helps and will really impact the banking industry. The concept of payment-settlement-clearance becomes redundant in the blockchain system, leading to a much-simplified money flow cycle. The cost of payment, trade, remittance, and even foreign exchange is nearly 0.
The emergence of bitcoin and blockchain thus marked the beginning of the transition from a carbon-based civilization to a silicon-based civilization. The big open question here is that can we create a new world currency that can benefit (in terms of much-improved features and services) human as a whole in the long run? What currency issue rules should we adopt?
With blockchain, we put an end to the monopoly of government-issued currency. Blockchain will simplify the set of concepts revolving around financial services and the complexity of the IT system. With blockchain, we have cryptocurrency that is more stable and safer than any currency that has ever existed before. This is “monetary and financial freedom”!