Cryptocurrencies have the power to disrupt financial services and combat corruption. This is especially true when it comes to using Cryptocurrencies to fight graft. For example, a new digital token can be created so that anyone in the world can buy and sell it on Bitcoin Traders—thus making it easier for those outside of the banking system to participate in the economy.
Moreover, many people believe cryptocurrency will eventually replace fiat money completely. The World Economic Forum estimates that more than two-thirds of global spending on financial services will be digital by 2025. That’s not even taking into account the potential for Cryptocurrencies to play a larger role in our everyday lives once institutional investors get involved with them. Read on to discover top ways cryptocurrency can fight corruption and prevent financial crimes:
It Can Be Used To Fight Illicit Trade
The biggest challenge facing the development of Cryptocurrencies is the issue of illicit trade. The majority of the world’s illicit drug trades are facilitated using the US dollar, euros, and other fiat currencies.
For example, according to an FBI report, more than 93% of all illicit drug money is exchanged using fiat currency. As soon as people start using cryptocurrency to buy illegal drugs, law enforcement will have a much more difficult time tracking the transactions. This is because cryptocurrency makes it easier to exchange money in an untraceable way. It’s easy to see how cryptocurrency could be used to fight illicit trade.
Create a Citizen’s Coin
There are many reasons why governments may want to issue their digital currency. One of the main reasons is to fight corruption. Blockchain technology makes it easier for citizens to hold their government to account by recording transactions transparently.
Before cryptocurrency, governments would have a difficult time controlling the flow of their finances. Now, with a decentralized ledger, citizens can see exactly where every block of government money is going. This can be extremely useful for fighting corruption.
It Can Be Used To Monitor Transactions
Today, many financial institutions track customer transactions. This allows them to keep track of everything that happens within their system. This might mean that a customer’s financial activity will be tracked across the financial system.
For example, a customer might purchase with a credit card. The credit card company will store the transaction history on its network, which will then allow the customer’s transaction history to be tracked. That might include information such as what store they were at, what they bought, and how much they paid.
Enable Distributed Ledgers and Smart Contracts
Blockchain technology enables distributed ledgers and smart contracts. Both of these are useful for fighting corruption. With a distributed ledger, people can see every transaction that takes place. This can help prevent corruption that occurs when someone bribes a government official for a specific transaction or allows for tax avoidance.
Identity Protection and Confirmation
A lot of financial crime involves tricking people into giving up their personal information. For example, a criminal might try to trick someone into opening up a new credit card account or allowing someone else to take out a loan in someone’s name. These crimes often involve obtaining sensitive information like social security numbers, birth dates, and other personal information.
With cryptocurrency, it’s easier to protect people’s identities. Anyone who knows someone who has a cryptocurrency wallet can create a new address and send their cryptocurrency to that address without giving out any personal information.
Conclusion
Many people think that Cryptocurrencies can’t fight corruption and prevent financial crimes. Fortunately, this is far from the truth. With the right technology, Cryptocurrencies can play a major role in fighting corruption. They can also be leveraged to help prevent financial crimes.
While Cryptocurrencies might not be able to replace fiat currencies tomorrow, they can be an extremely useful tool in the fight against corruption. With the right legislation, they could even be used to help prevent financial crime.