CRYPTOCURRENCY, in one form or another, has been around since 2009, and is quickly growing into an alternative to fiat currency – government-issued currency not backed by a commodity like gold or oil – for many people around the world.
Countries like Brazil, Mexico and other developing countries have shown high adoption rates, and banks dealing in large part with cryptocurrency have seen some measures of success in some instances, but have fallen victim to its volatility in others.
On the other hand, traditional fiat currency has also seen its own evolutions through digitisation. Digitisation in banks has resulted in online and cashless payment systems, digital wallets and digitisation of securities. Through digitising their operations and resources, banks have made strides in financial inclusion that were not possible before.
In TT, while cryptocurrency has seen growing interest, the legislative and regulatory framework that allows for its safe and efficient use has not yet been developed. On Tuesday regulators, the TT Securities Exchange Commission (TTSEC) and the Central Bank held discussions with the public on cryptocurrency, with the intention of getting feedback to develop a regulatory framework. But this begs the question: with the developments being made in traditional banking, which already has its own checks and balances, what does cryptocurrency do for the public that the new, digitised banking industry isn’t doing already?
Speaking to Ian T Alleyne, CEO and founder of Paywise, one of TT’s Central Bank-approved e-money issuers after the crypto conversation, Business Day was told with the current frameworks in place for both cryptocurrency and fiat currency, crypto is not operating at its fullest potential, and therefore, digital fiat currencies are closer to providing people with the services they need.
Crypto isn’t for everyone
Alleyne said there is less regulatory pushback for traditional fiat currency, which makes it more readily accessible.
“It builds on the old banking financial system that we have right now, so that is quite pervasive,” he said. “You will find that digital currency has easier dissemination because of that. Cryptocurrency has an entire alternative system that has to be built out.”
He said several conditions need to be met to make cryptocurrency more reachable to the man on the street.
For businesses Alleyne said there isn’t enough depth in the market at this point to supply businesses with the amount of money needed for trade and export.
“Because you are talking about hundreds of millions of dollars in terms of foreign exchange,” he said. “There are some informal sources, but even those may not be able to supply huge quantities on a consistent basis.
“For cryptocurrency to serve as an alternative, you need to have something like a cryptocurrency exchange that has depth and where people can go there and buy the cryptocurrency for trade.”
So, if it isn’t for businesses and it isn’t for individuals, who does cryptocurrency actually benefit?
Alleyne said in T
