Global view of cryptocurrency and its impact on human rights

Cryptocurrencies have gained widespread adoption as a means to facilitate cross-border payments globally. It has created a global payment system that facilitates transactions across geographical borders, bringing unbanked and underbanked individuals closer to the digital world. In this article, we will examine each of these elements and explore the regulatory framework and governance surrounding cryptocurrency use.

Cryptocurrency’s Potential to Empower

Privacy and Security

One of the key principles of cryptocurrency is its emphasis on offering users control and privacy over financial transactions. Crypto and blockchain technology ensure transparency while preserving the users’ privacy and encrypting their personal and financial identities. Cryptocurrencies enable individuals to participate in transactions without requiring their formal identity, thereby facilitating pseudonymous and cryptographically encrypted transactions, which enhances privacy and security, and empowers them to control their financial information.

Speeding Up Cross-Border Transactions

One of the primary advantages of cryptocurrency that facilitates cross-border transactions is the speed at which these transactions occur. Traditional modes of payment, such as credit cards and bank transfers, often take several days and involve multiple intermediary banks and different currencies. 

However, Cryptocurrencies enable fast and affordable 24/7 transactions. This is vital for industries that require quick transactions like emergency aid or international trade, reducing transaction costs by eliminating intermediaries like banks. This speed is particularly beneficial for sectors where time is of the essence. For example, the best crypto slots sites, which require quick transaction times, as well as emergency financial assistance, where delays can have serious consequences, and international trade, where timely payments are crucial to business operations, all stand to benefit significantly.

Financial Inclusion

A sizable part of the world’s previously underbanked or unbanked population has been granted access to crypto financial services. Cryptocurrencies have eliminated the existing barriers to cross-border transfers, enabling seamless peer-to-peer blockchain transactions worldwide. It has opened up new avenues for people around the world who face challenges with traditional currencies and banking systems, such as limited access, lengthy processing times, and high fees. Cryptocurrencies facilitate financial inclusion, providing access to dependable and affordable financial services for individuals in underserved regions, thereby alleviating poverty and promoting economic growth worldwide.

Challenges and Controversies

• Illicit Activities: A significant challenge for legislators has been the use of digital assets in tax evasion, corruption, political funding, money laundering, and terrorism. While crypto has immense potential to empower individuals and significantly impact individuals trying to make cross-border payments, illegal activities are quite common with these financial assets. Cryptocurrency’s digital assets provide anonymity to users and are easy to store globally, posing a huge challenge for law enforcement agencies to access transactions. This makes it favorable for illicit actors to conduct transactions and engage in money laundering using crypto.

• Volatility: Cryptocurrencies are also known for their dramatic price swings, which can result in significant individual losses due to high volatility. The highly volatile nature of crypto poses a challenge for cross-border transactions. This inherent nature of digital assets’ unpredictable values introduces the element of risk for both individuals and businesses. Volatility can result in discrepancies in transactional values, making it difficult for users to accurately predict the amount they will send or receive, which affects the cryptocurrency’s reliability as a medium of exchange.

• Regulatory Challenges: Cross-border transactions facilitated by cryptocurrencies lack a clear and standardized regulatory framework. Different nations have adopted varying stances towards the use of crypto, leading to diverse regulatory policies that hinder seamless transactional flow. The lack of a globally accepted guideline poses a considerable barrier to widespread acceptance and adoption by financial institutions.

Conclusion

Developing nations benefit from crypto by increasing financial inclusivity, reducing transaction time and fees, and enabling secure cross-border payments. However, among all these benefits, excessive price volatility, regulatory challenges, and illicit activities may have reduced the benefits of using crypto. The future growth of cryptocurrencies and blockchain technology is highly reliant on the regulatory framework that may lead to global crypto adoption and price stability. However, it is still too early to predict how crypto regulations will be formed globally by 2024, given the diverse policies adopted by different nations worldwide.