On this sixth episode of #MXTalks, the speakers explore topics ranging from security concerns around cryptocurrency payments, hacking incidents, and the challenges to cryptocurrency adoption. They also debate whether CBDCs can bring trust and bridge the gap between traditional finance and DeFi, as well as some of the complications that may arise from using stablecoins. For all you busy people out there, here's the gist of the episode condensed into a 5 minute read! You're welcome.
1. Crypto VS Fiat VS CBDCs?
– Crypto complements fiat, along with CBDCs.
– They give the consumers options, with each type of currency having their pros and cons.
– CBDCs offer the convenience for converting crypto to fiat.
– However, there are concerns about the centralized control of CBDCs.
2. Crypto’s Security Concerns
– As much as the speakers are keen to see an increase in crypto adoption, they acknowledge that there may be security concerns with crypto payments and hacking incidents.
– Solution providers offer different types of protection, but even with these measures, wallets and assets can still be stolen.
– There is therefore a need for mitigation plans and safety nets to increase security within the crypto industry.
– Most of the security issues related to crypto are self-inflicted, i.e. human error (not protecting passwords and assets) rather than technology.
– There is a need to educate users on how to better protect their crypto assets, e.g. the risks of using public wi-fi, but also important to lower the barrier for accessing crypto assets as this will reduce potential human error.
3. Challenges of Crypto Adoption
– The biggest challenge to crypto adoption is unclear, with some arguments against cryptocurrencies claiming that it is a closed system.
– Companies like Pundi X and HamBit make it possible to use cryptocurrencies for everyday purchases.
– Critics argue that gas fees can be volatile and create uncertainty.
– For example, Pundi X supports different blockchains and Layer 2 solutions to minimize gas fees.
– It is too early to write off cryptocurrencies as a closed system.
– There is opportunity for crypto payments in B2B, B2C, and cross-border transactions.
4. Why Crypto?
– Crypto is a good replacement for fiat in cross-border transactions.
– Two examples are when (1) the country’s own currency is volatile and subject to inflationary pressure like in Ghana and Turkey, where crypto can be a better store of value; and (2) when travelling abroad, crypto is a good replacement for fiat as a universally accepted payment method since one does not need to keep small change, especially for less powerful currencies that are not widely accepted elsewhere.
– Crypto payments are potentially useful for both B2B and B2C.
– In one example, cross-border salary payment was stuck in one of the intermediaries when transferring money through traditional banks. It was non-trivial to try to find which intermediary bank is the one who is the bottleneck for the transfer. Crypto does not suffer from this problem and payments would have been instantaneous.
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This article has been generated by AI, extracting content from our recent podcast episode. Some nuances or context may vary from the original audio discussion.