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BUSINESS | SUNDAY • 13 MAY 2018 maltatoday B2 Cryptocurrencies and blockchain will reshape our nancial future Journalist Patrick J O Brien explains how cryptocurrencies are here to stay and how governments and regulators need to adapt quickly WHILE this may just sound like dull news one might find in a financial newspaper, its impli- cations for everyday people are major. With blockchain, things as mundane as medical records, identity documents and even qualifications and credentials could be stored and verified eas- ily, scrapping a lot of the day- to-day grind of dealing with the bureaucratic systems of modern life, and allowing employers to make sure that a person's CV, for instance, is not merely a fan- ciful story tailored to get a job. Due to cryptocurrencies be- ing used as decentralised to- kens to execute transactions on blockchain, and considering governments and corporations are partnering with these block- chain developers who provide a service, investors see value in buying up other cryptocurren- cies. Unlike bitcoin, blockchain as a service that is directly applicable to our everyday lives is unlikely to simply collapse, especially considering its adoption by big players who clearly see a future for the technology. Investing in cryptocurrencies that form part of a service eco- system, rather than solely offer- ing ethereal tokens that have no real, fundamental value, could prove to be the new stocks and shares, as blockchains move from being perceived as "just a fad" to a mainstream technology we all rely on in our day-to-day lives. Cryptocurrency is a disrup- tor to the banking industry that should be taken seriously. When people like International Monetary Fund managing di- rector, Christine Lagarde, say cryptocurrencies could displace central banks and international banking, that's very significant. The lack of intermediaries and oversight in cryptocurrency, which operates on peer-to-peer transactions, makes it remark- ably attractive for investors, who can cut out fees for banks and financial advisers. Central banks around the world are beginning to come together to discuss and agree on how fiat currency (digital currency that is recognised and forced into circulation by a gov- ernment as opposed to bitcoin which does not have to be ac- cepted by the receiving party) is being represented. They also are experimenting how they can change and dictate banking policies. Countries such as Singapore have experimented with prototype solutions, such as the Project Ubin, that could dig- itise Singaporean dollars into the market. However, it's going to take time. The rate and speed of adoption is crucial though. Over the past year, these banks have publicly talked about how they see value in representing cash on leger in terms of abil- ity to access cash for the gen- eral population, or the ability to ensure there is enough liquid- ity in the market when a reces- sion strikes. The cryptocurrency market, which trades various digital-based coins, can look ex- citing, scary, and mysterious all at once to the casual observer. Its pioneer, Bitcoin, dramati- cally surged in value and steeply dropped (before picking back up) in recent months. ICOs (initial coin offerings for new cryptocurrencies), meanwhile, are emerging at a head-spinning rate. While some financial advis- ers remain skeptical, it's hard to ignore the massive amount of money invested in the field. For instance, if implemented in government operations, block- chain will help break down bar- riers built from bureaucracy and corruption by providing a means to bypass existing power structures. It could be used to transform the way charities are created and regulated. By imple- menting a transparent system of transactions that includes de- posits of cash, transfers of dona- tion and expenses spending will bring about a paradigm shift on how rules are enforced for these organisations. Moreover, this technology has the competence to revamp the present system by automating manual processes, eradicating frauds and controlling the issues for authorisation. Its implemen- tation across diverse sectors can be a solution to the most foun- dational problems of mankind. Hence, blockchain could be the perfect platform to transform a knowledge-driven economy into a digital-inclusive society. Exante CEO Alexey Kirienko and Anatoliy Knyazev, global pioneers in cryptocurrency Binance CEO, Changpeng Zhao. Binance is now the largest cryptocurrency exchange platform in the world and will soon have a base in Malta