Gracy

Bitcoin

Million

Trillion

<ul class="list-ic vertical">
 <li>1 <a>The International Monetary Fund (IMF) raised its concern over the surging momentum of “cryptoization”.&nbsp;</a></li>
 <li>2 <a>The major concern is the potential displacement of traditional currencies by cryptocurrencies.</a></li>
 <li>3 <a>The surge in crypto adoption is boosted by centralized cryptocurrency exchanges.</a></li>
</ul>
Most recently, the International Monetary Fund (IMF) raised its concern over the surging momentum of “cryptoization” with the majority of individuals favoring crypto assets, such as Bitcoin and stablecoins backed by the US dollar over traditional currencies.&nbsp;
The shifting trend towards <a href="https://www.thecoinrepublic.com/2023/11/20/polkadot-price-prediction-are-bulls-optimistic-in-dot/" target="_blank" rel="noopener noreferrer nofollow">crypto</a> is a severe threat to the central banking system and related monetary policies globally.&nbsp;
The IMF cautioned in a combined report with the Financial Stability Board that the growing adoption of stablecoins could jeopardize the effectiveness of the monetary policy and have significant implications for monetary stability.&nbsp;&nbsp;
The major concern is the potential displacement of traditional currencies by cryptocurrencies. Suppose people opt for Bitcoin and U.S dollars backed stablecoin, it signifies the rejection of local currency issued by the central bank of any nation.&nbsp;
Media outlet CNN debated over the issue of crypto adoption and its larger impacts on traditional finance with the managing director of Bitget Gracy Chen.&nbsp;
Chen highlighted that “ Crypto has had its larger impact on the quality of life in economically unstable regions or those with limited access to traditional banking,” “ The decentralized and cross-border nature of cryptocurrencies makes information more transparent, thus increasing the level of financial education in these regions.”&nbsp;&nbsp;
He added “The industry is regulated in a manner similar to traditional financial regulation,”&nbsp; “Here, however, we are dealing with a higher level of risk due to the underdeveloped state of financial regulation in emerging economies.”&nbsp;&nbsp;&nbsp;
<h2 class="wp-block-heading" id="strong-is-surging-crypto-adoption-a-severe-threat-to-traditional-finance-strong">Is Surging Crypto Adoption a Severe Threat to Traditional Finance?&nbsp;</h2>
Chainalysis published a report on crypto adoption and the report highlights that India holds the foremost position in the toppers list of crypto adopters. The report was prepared with the help of on-chain data, transaction volume data of centralized exchanges, and output provided by the authorities working in regions.
The sudden surge in crypto adoption is majorly boosted by the centralized cryptocurrency exchanges. Nigeria holds the second ranking in the crypto adoption list.&nbsp;
There are more than 420 Million cryptocurrency owners globally. The report of Chainalysis highlighted that Thailand is third in terms of crypto adoption. Thailand’s status as a summer vacation destination is believed to be a primary reason for the high adoption rate.
Despite some of the most populous countries featuring in the index, global crypto adoption is relatively low. For this report, Chainalysis only evaluated crypto adoption in 154 nations and the majority of them are from UMI, LMI, and LI categories.&nbsp;
However, to think that decentralized finance is becoming a threat to traditional finance (tradfi) is oversimplifying. The overall cryptocurrency market is over $1.4 Trillion which is hardly a fraction of traditional finance. The defi market is still in the nascent phase and garnering a user base with time.&nbsp;
Moreover, crypto proponents believe that defi is not a threat to tradfi. Instead, defi can sustain along with traditional finance and blockchain-like technologies can resolve the inherent issues in the finance sector.&nbsp;
<h4 class="wp-block-heading">Disclaimer</h4>
The views and opinions stated by the author or any people named in this article are for informational ideas only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss.

Surging Crypto Adoption a Threat for TradFi: Gracy Chen

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Thecoinrepublic.com

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