Present and future of Money-A transition in progress:
Future Money is really a transformation in the financial sector.
From the earlier ages to the present, we have been in need of a financial transaction to exchange goods and services. In the olden ages, we had a system called the “Barter System”. Through that system, people exchanged their required services with the barter they have. But today, It is called a mortgage.
Yes, if you want to buy or sell any property or things, then the broker will fix the mortgage amount and gets from his client. Because of certain misconceptions and misuse, the kings stopped the barter system and introduced paper currency. This is the third generation money system still prevailing around the world. People are well acquainted with this third-generation money and settled with its coziness. But change is inevitable, right?
There are talks about the fourth generation money system which is the digital payment.
In this blog, we can take a look at the present and future of money and its transition progress.
Present status of the currency:
In this current scenario, the most used money format is Fiat currency. It is the most liquid yet most effective usage for transacting. You go to a supermarket, buy products and give them money. That much easy the flow is. No other forms are so liquid as the fiat currency. So, the present world is at ease with the present status of the fiat currency.
Since the early 21st century, people started moving towards the card payments. With the debit cards and credit cards, people paid their bills and their challans quickly without carrying huge amounts of money. This is the place where the Internet of Things(IoT) got its initiation. Also, this is the place where the point of sale devices got its phase.
With the emergence of card payments, Banks made its operations more easy and effective. You need not stand in a huge line to deposit or withdraw your money. It is just a minute task if you go for the ATM. ATMs and the card payments had made people’s life easier with the transaction in fiat currency.
The real update of the fiat currency took place during the midst of the first decade of the 21st century when the supermarkets and the malls came in. This acted as a source of conglomeration and accommodation where all forms of the market became more prominent and reachable. You are in any corner of the world, you can get all kinds of products due to the emergence of globalization. That is, you can get a german hat in the Indian supermarket or in an Indian mall.
Globalization had updated the flow of fiat currency to the next level wherein later years, the introduction of payment gateways like google pay and other international transaction-based payment gateways like PayPal emerged. Despite the facilitation of payments, fiat currency had failed in certain aspects, that had heavily hit people’s expectations. Some of the disadvantages of the fiat currency transactions are discussed below:
Disadvantages of the fiat currency in the present situation:
Time constraints — If you want to send money to your relative abroad, it will take time. You have to meet the exchange office and send your money. They will take nearly 5 to 7 days to process the money to the desired location. Also, they will attract charges for sending your money. This kind of time constraints is one such disadvantage for fiat transactions. Yes, Payment gateways do not follow any such procedures in sending or receiving money, but it will take some time to reflect the transaction in your bank account, right?
Restrictions and regulations — You cannot spend huge chunks of money to your relative or send abroad. There are restrictions and regulations fixed by the Central or Federal banks to process a limited transaction. So, if you want to send money to your dear ones for hospital expenses, you can follow only the limitations fixed by the federal bank.
Taxes and surcharges — If you exceed the limit of transactions that you can send or receive per day, then the IRS comes in. You have to explain the money flow and you need to pay the taxes for the remaining amount that you are sending or receiving. Almost one-half of your money gets away with taxes if you have not explained satisfactorily.
Demonetization and Devaluation — The value of currency changes from time to time-based on market demand and supply. So, fiat is unstable despite better control from the Federal bank authorities. Also, if a particular currency is announced demonetized, then the money loses its value.
To prevent these mishaps, the new generation currency came up as the fourth generation currency.
The future state of money:
The future state of money will be completely different. The ripple was felt during the first decade of the 21st century. Yes, with the emergence of cryptocurrency, the entire financial system got into a transition. Yes, indeed, no one had ever believed in bitcoins in 2008. Its value too stated at a very low level. But later at the end of 2010, the value whooped to higher values. Later in early 2015, many other cryptocurrencies emerged with its origination as a token currency.
Why Cryptocurrency is the future money?
There are several cases that why cryptocurrency gained its pace as the future money. Some of them are discussed below:
- Regulation — With the regulations and restriction for the cryptocurrency is nil, most of the population is interested in trading and exchanging in cryptocurrencies.
- Value — No cryptocurrencies are different in value based on country. It is a centralized value and it is traded based on the overall coin performance. So, it is more efficient for global trade.
- Time management — You need not worry about time if you are sending exchanges via cryptocurrency exchange software. All transactions can happen within a minute and no restrictions on the limit of the transaction are placed. Yes, Exchanges attract fees but it is a maximum of 0.12% to 0.25% only.
- No taxes — As this is not a regulated currency, this will not attract taxes or surcharges.
- No value reduction due to external factors — Like fiat currency, this market is not on the basis of demand and supply.
So, it is best to keep yourself updated and catch up with the future train of currency to prevent confusion. But many of them do not know-how. If you want to stay hold to the future money, follow the process:
- Trade-in cryptocurrency using fiat currency- This will definitely increase your stake in cryptocurrencies.
- Start your cryptocurrency exchange- This is one of the efficient and the most recommended ideology if you want to jump into future money. Because it not only makes you acquainted with cryptocurrency but also makes you an entrepreneur in an upcoming business arena. Relying upon a professional cryptocurrency exchange software development company will help you to structure the best cryptocurrency exchange for your crypto business. You can start your Whitelabel exchange business or a mere clone of an already existing popular crypto.
Change is inevitable and it is proved in the financial sector too. Things have changed in terms of currency, but the value for the currency has not changed. So, knowing the technological developments in mind, one should act accordingly to achieve in this competitive world.