Source: http://cryptocurrency-news.webflow.io/projects/cryptocurrency It would initially appear that traditional leaders of the financial markets, such as big banks and stock exchanges, are unshakable and invincible. But in fact, they see the storm clouds gathering above them as it becomes more and more possible that a new wave of crypto startups will be able to replace them. Why Traditional Finance Is Broken “Inefficiency” is the best word to describe current global finance. This may seem initially contradictory considering that trillions of dollars are flowing daily through banks and financial institutions around the world, employing millions of staff members and serving billions of customers. However, the banking system is extremely unreliable and fragmented. Many legacy systems and processes contribute to its inefficiency and increases risks along the way. For example, according to PWC , 45% of such financial intermediaries (from money transfers to stock exchanges) suffer from cyber crimes every year. At the end of the day, the public ends up paying for their incompetence along with huge commissions for the privilege of using their services. analysts Moreover, the complexity and inflexibility of modern financial institutions and banks deprive billions of people access to basic financial services. According to recent statistics, only 62% of the world population have bank accounts and almost 40% of people are separated from the global financial system. Nevertheless, the situation will change in the near future due to the blockchain and cryptocurrency. So, what can we expect? The New Reality for Banks Banks need to wake up and smell the coffee — that they are about to be upstaged because of their many inefficiencies. They need to come to the realization that there are certain things that need improving: Transaction Costs Need to be Lowered The main disadvantages of today’s financial system are large transaction costs and ongoing contributions to third parties. This may be clearly seen in the process of cross-border payments when participants lose money on currency exchange and bank commissions due to the nature of payment systems. In some cases, the payment from the sender in one country to the recipient in another one goes through up to six different channels, each one incurring its own additional fees and time delays. Blockchain technologies can be used to minimize costs, facilitate cross-border transactions, and increase their speed. This will free a great amount of assets in the global economy. According to the World Bank’s , a reduction of costs in cross-border payments by 5% will raise $16 billion in savings per year. estimates One of the new crypto-startups solving this problem is . Launched in January 2017, this Ethereum-based payment system makes transactions easier and less expensive for both sellers and buyers. In general, the system allows sellers to carry out transactions 5 times cheaper and 10,000 times faster than traditional payment systems. Monetha 2. Money Transfer Fees Need More Transparency Cryptocurrencies’ development provides financial services to billions of people not dealing with traditional banks. A number of new fintech startups are already offering solutions for money transfers and goods payment through digital money with lower costs, faster procedures and more transparency. For example, allows cryptocurrency spending for the purchase of ordinary goods by using a mobile app that converts cryptocurrency into fiat money. Another project, , produces bitcoin debit cards for customers that can be used in millions of shops worldwide, and allows the withdrawal of fiat money in over 30 million ATMs. In addition, there are working in the lending and microcredit domains. TenX SpectroCoin a number of crypto projects 3. Digital Services Are More Important Today Due to the rise of technology, today’s customers want to be able to access their banking services in a more convenient and less expensive way. Studies also show that . So if customers prefer to bank online instead of visiting a bank, they will simply update the bank app to a new cryptocurrency wallet, with low fees for transfers, purchasing, and loans, and can then order a plastic card. instead of visiting banks, 40% of American customers prefer digital communication Not Only Banks: Changes on Wall Street These problems, typical of banks, are also endemic to the stock markets. We see intermediaries eating into cash flow and charging high commissions while trying to keep these costs as opaque as possible from the end user. Fortunately, these problems being perpetuated by Wall Street can be rectified through new, disruptive technologies. There are already some projects allowing users to invest in a more efficient and less expensive way. Today, the market infrastructure is organized only for the benefit of investment banks and stocks and futures exchanges, instead of the players making transactions using financial instruments that only pay growing commissions. Our service, , allows investment into cryptocurrencies under more favorable conditions than those offered by fiat stock exchanges. This applies to short sell operations on crypto assets, as participants can borrow cryptocurrency from other users at a low rate. Celsius “Celsius Network solves Wall Street’s inefficiencies” Our Ethereum-based P2P lending and borrowing platform may replace big banks and futures exchanges, like the CME and CBOT, with coin holders that will earn returns by lending. By allowing Crypto Funds and large financial institutions to hedge the market through Celsius, profits stay within the crypto ecosystem instead of going back to Wall Street. Their stupidity in shorting the Crypto market will help us distribute the gains within the crypto community rather than the profits going back to traditional financial instruments. The stock exchanges see the clouds gathering, and so do the brokers providing clients with access to these trading platforms. The project is planning to exclude this intermediate link from the chain for better investments. It is a system of online trading with no brokers, and its liquidity pool is completely owned by ICO token investors. Spectre Don’t forget that compared to the booming market of ICO, the traditional IPO market is essentially . dead Conclusion: Corporations vs. Startups Evidently, regular finance players won’t let the grass grow under their feet. Some of them are analyzing reports promising infrastructure costs, or total savings from to , due to blockchain technology implementation. Bank of America and Deutsche Bank are already experimenting with their own blockchain-based services. lower $8–12 billion $20 billion a year However, there still are lots of big finance executives who just do not get what cryptocurrencies and blockchain will bring to the industry — like JPMorgan Chase Chairman and CEO Jamie Dimon who that if you’re ‘stupid’ enough to buy bitcoin, you’ll pay the price one day or Buffett partner Charlie Munger who bitcoin ‘total insanity’ and recommended to avoid it ‘like the plague’. says called It is now obvious that cryptocurrencies and the blockchain will increase the efficiency of finance and save customers’ money. And while big finance market players have an established business model, a lot of money and a large number of clients, startups have new methods and technologies which can wipe up those who will be unable to change.

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