With the promise of control, direct transfers, minimal charges, and financial freedom it is no wonder that cryptocurrency is being adopted on a global scale. Bitcoin, the first blockchain-based cryptocurrency, still remains the most popular and most valuable at a total market cap of around $927 billion.
The fast growth and adoption of cryptocurrency
While some have doubted the validity of cryptocurrency since its creation in 2009, there are those who have seen its potential and refuse to remain behind.
Experience with mobile money
In Africa especially, there has been an impressive uptake of cryptocurrency which has been noticed in Ghana, Cameroon, Kenya, Nigeria, South Africa, and Botswana. The fast adoption could be that in Africa there is already a wide adoption of mobile money platforms such as M-Pesa which makes the concept of virtual money seem a little closer to home.
Decentralized nature of cryptocurrency
Cryptocurrencies also aren’t controlled by any central authority, which theoretically protects them from any interference by governments and helps in avoiding currency instability.
Unreliable local currencies and hyperinflation have also played a part in the cryptocurrency boom. When the Zimbabwean dollar skyrocketed in 2015, some people turned to trading bitcoin instead.
Thanks to cryptocurrencies, there is an alternative to traditional government-managed currencies where there’s historically been so many errors and negative side-effects, especially in some African countries.
With the confines of needing to have a bank account in order to make financial transactions, there is a lot more inclusion and more financial freedom with a means to make financial transactions.
Reduced charges for transactions
In addition, Cryptocurrencies aim to cut out the middlemen, such as credit card companies or banks, making it cheaper to transfer money from one virtual wallet to another. It also allows for the Africans in the diaspora, to safely send money to their loved ones at home without having to pay hefty fees.
It is for these reasons that solution providers like YellowCard exist, to make sure that the gaps are bridged and that people can make financial transactions and trades using cryptocurrencies on a safe platform.
Cryptocurrency as a funding source for pension schemes
As cryptocurrencies continue to grow and expand in their adoption, it becomes more apparent that they can provide a myriad of solutions for other challenges. One such example is the pension scheme problem.
Although pensions still exist, many of the companies that offer them have struggled to make good on the promises they made to their former employees, given the turbulent nature of the global economy.
Lack of transparency
The biggest catalysts for the pension crisis however are a serious lack of transparency at all stages throughout the pension-managing process and changing legislative agendas.
Those with the responsibility to pick a pension plan find it difficult to understand where the fund is invested, how it performs, and if it can meet specific organizational needs. Accordingly, it’s nearly impossible to identify a fund that will act in good faith when it comes to timely and consistent payments.
Decrease in the young population
There has also been a dramatic decrease in the young population who are supporting the retired population which reduces the number of funds that can be collected to support the retired population and a lack of transparency and control for pension plans and beneficiaries
All these challenges can however be addressed, allowing the population that has worked so hard to take their retirement without any worries.
The pension scheme solution
Blockchain, a revolutionary computer-based record-keeping technology that functions as a digital ledger, comes at a crucial time and may represent the savior of pensions everywhere, thanks to the unique ways that it’s being applied by ambitious projects in this industry.
Blockchain addresses these challenges by working on a shared, decentralized ledger that helps to align stakeholders in any single system. This ledger also provides access to crucial information relevant to all pension members.
This is particularly helpful with pensions, for which a simple, ledger-based system would let individuals audit the funds they’re considering.
Blockchain also encourages greater accountability, with reporting mechanisms that can permanently punish funds that don’t follow through by inscribing results on the shared ledger.
The future of cryptocurrency
According to MarketsandMarkets, the cryptocurrency market size is expected to grow from USD 1.6 billion in 2021 to USD 2.2 billion by 2026, at a CAGR of 7.1%.
This can be attributed to the fact that Cryptocurrency represents the beginning of a new phase of technology-driven markets. Markets that have the potential to disrupt conventional market strategies, longstanding business practices, and established regulatory perspectives. All to the benefit of consumers and broader macroeconomic efficiency.