Blockchain in the Bahamas and the Future

The cryptocurrency community has been hoping for the day that they finally enter the mainstream financial world. This week saw the first occurrence of this since blockchain currency made its debut public offering back in 2009, with the Central Bank of the Bahamas including the country’s own cryptocurrency, the Sand Dollar, on their balance sheet for April. The sum that was included is relatively small, but the fact it was included is monumental and will be seen as one small step for backers of blockchain.

We’ve seen a variety of reports this year stating that many banks and financial institutions across the globe are looking into blockchain projects. While these are all still very much in the testing phase, it’s still moving things in the right direction. It’s no illusion that blockchain is making an impact on the public and gone are the days when it was considered to be an online currency used for shady transactions. Things are moving quickly.

A lack of trust between the public and government is reflected in the trust between the public and central banks. With a sharp rise in the number of ebanks offering a service that makes traditional banking norms look outdated, it’s no wonder cryptocurrencies are surging in popularity. Customers are wondering why they pay for transfers and are being charged fees for holding their money in a bank, when they could go to an e-bank or use a blockchain currency and handle their finances independently without charge.

The equivalent of $48,000 that was reported by the Bahaman Central Bank has caused a stir, with different bodies giving their opinion on how cryptocurrency should be reported. The lack of clarity is a global issue, with industry regulators such as the Association of Internal Certified Professional Accountants (AICPA), the Financial Standards Board (FSB), the Bank of International Settlements (BIS), and the Public Company ACcounting Oversight Board (PCAOB) trying to iron out the ambiguity that has arisen. While there are many working on this issue, it’s a long way away from being resolved and a blueprint being laid out accounting for cryptocurrencies.

The question for regulators is how to fit these new financial instruments into a system that has been dealing with traditional currency classifications for years. Does it make sense to categorize the varying currencies into one system and then treat them the same? As cryptocurrencies continue to grow and influence the mainstream market, as the Sand Dollar project has done, central banks need to think how they are going to handle digital currencies. From China to the Bahamas, governments are wising up and investing in the modernisation of financial systems.

But it’s not just banks. We’ve seen a growing number of cryptocurrency trading platforms popping up online in the last couple of years. The likes of coinbase, Kraken, and Kucoin are changing the shape of the cryptocurrency landscape. Banks simply aren’t able to compete with Kucoin fees and the low rates applied by these online platforms. Things are moving very quickly and financial institutions need to wise up and accelerate plans for integration of cryptocurrencies.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes