Brexit, danger or opportunity for cryptocurrencies?

The old false legend of the meaning of the word crisis in the Chinese language, which according to the popular accord would mean both “danger” and “opportunity” is a good simile for the role that cryptocurrencies can play in an anomalous and potentially economic situation dangerous . as it is the one that faces the EU and the euro zone with the Brexit.

Usually in these situations where a monetary system such as the euro loses one of the participants, such as the United Kingdom, more important in the project (more if it has one of the most prominent financial centers in the world), this project faces serious dangers as they are the flight of capitals before the uncertainty and the flight of companies. But this leak is always to another currency or to another territory. But in this case there is one more option, cryptocurrencies.

WHAT CAN BE THE ROLE OF CRYPTONS IN THE UK DEPARTURE OF THE EURO?

The United Kingdom and the European Union have been able to agree on an orderly decoupling, which is an important geopolitical and strategic event, with global implications. Uncertainty about the outcome of the Brexit referendum has already begun to weaken growth in the UK, which is expected to worsen further. The International Monetary Fund has warned that the EU could lose up to 1.5% of the gross domestic product of a Brexit “without agreement”, while the United Kingdom would suffer an even greater blow: a loss of 4% of GDP.

The current lack of direction in the Brexit negotiations has led some people to the conviction that the period of inevitable instability that Brexit implies is a possibility, since both Europe and the United Kingdom are running towards the deadline next year.

Danial Daychopan, of the Crypto Plutus company, suggests that due to the interdependence of the pound and the euro and the fact that both are based on other currencies, it allows decentralized cryptocurrencies to offer a “variable and stable alternative” for consumers and companies in the period after Brexit.

“… In economies that are not stable, we are already seeing how digital economies develop and prosper. We are approaching a period of instability and people need to understand that cryptocurrencies will be a force for good, not just an instrument for speculation. “

THE REGULATION OF THE MARKET OF THE CRYPTOCURRENCIES AFTER THE BREXIT

Another relevant factor to take into account is regulation. Up to this moment and with the Brexit around the corner UK has not raised any regulation regarding the cryptocurrencies.

However, the EU has already made clear that it does not intend to recognize any cryptocurrency in the short term and an EU report suggests that banks could incur malpractice crimes if they use cryptocurrencies. While this intention to regulate cryptocurrencies is not homogenous within the EU as some member states such as Slovenia and Malta have chosen to welcome and encourage the use and implementation of cryptocurrencies, it is quite clear that there is a division in the EU. and some of the states as to how to deal with the alternative that supposes the cryptocurrencies to states like Greece and the UK.

In the last days of March, the United Kingdom announced that it created a working group to monitor the use of cryptocurrencies within its territory. Ultimately, it was intended to try to reduce the risks involved in the cryptocurrency trade. Many speculated that the creation of this working group would mean that the regulations would come soon. That has not yet taken place.

While answering the question about how His Majesty’s government was handling the issues related to cryptocurrencies, Lord Bates reminded everyone of the existence of this working group. It is very unlikely that the UK will propose regulations that mimic those that the EU is trying to impose. We probably will not know much about the government of the United Kingdom with respect to cryptocurrencies until the end of Brexit.

THE CHALLENGE OF THE USABILITY OF THE BITCOIN AS A TOOL TO AVOID DEVALUATIONS FOR THE STREET USER 

People standing on the street are already moving or have moved to Bitcoin as the chaos of the Brexit continues to get bigger and more messy.

One of the unfortunate advantages for cryptocurrencies is the always probable scenario of a disorderly breakdown of economic relations with the EU. This is an eventuality that would force people to adopt Bitcoin or some form of cryptocurrency to avoid bureaucracy, and that can prevent a deceleration or devaluation thanks to a change in the economic balance, and sociopolitical. Cryptocurrencies have the power to eliminate what companies and individuals consider inconvenient and trivial. So it’s time for cryptocurrencies to emerge as a real opportunity to fiat money that guarantees stability and speed.

It is very clear that cryptocurrencies and the blockchain are predestined to be a disruptive technology and probably the Brexit is one of the first large-scale occasions, where to demonstrate its enormous potential. In the hand of all the actors of the Blockchain ecosystem is that this role is relevant and useful, or that it is a matter of simple speculation and we return to the errors of confusing value and price that have historically damaged so many cryptocurrencies.

 

Enric Martí

Economy fan, hangued, hooked on crytocurrencies and junkie of audiovisual stuff…on rehab

Enric Martí

Enric Martí

Economy fan, hangued, hooked on crytocurrencies and junkie of audiovisual stuff...on rehab