September 11, 2023
By Anjali Kochhar
In an exclusive conversation with Anjali Kochhar of NFTMetta, Sathvik Vishwanath, co-founder and CEO of technology startup company Unocoin sheds light on how blockchain technology will reshape the fundamental concepts of money and traditional finances in the coming decades.
Started in 2013, Unocoin is a Bangalore-based technology startup and is India’s first entrant into the Bitcoin industry. The company operates India’s largest (in Indian customer base) BTC-INR trading platform which enables Indians to buy, sell, store, use, and accept Bitcoin. The startup has been featured among the Top 20 companies in The Fintech20: India list and has won prestigious titles like ‘The Golden SABRE award’ in financial communications for the project, ‘Bit-by-Bit: Building Bitcoin in India’ and ‘TECH30’ award from YourStory.
How might blockchain technology reshape the fundamental concepts of money and traditional financial systems in the coming decades?
Blockchain technology has the potential to reshape money and financial systems by introducing decentralized, transparent, and borderless alternatives. Bitcoin’s emergence as “digital gold” suggests a new store of value, challenging traditional assets. Cryptocurrencies like Bitcoin and Ethereum offer global currency possibilities, enabling efficient cross-border transactions without intermediaries. Smart contracts on blockchains could automate complex financial processes, reducing reliance on intermediaries. However, regulatory challenges and technological advancements will shape their trajectory, determining if they become mainstream alternatives or augment existing systems.
What potential benefits and challenges could arise from a future where cryptocurrencies and blockchain are at the core of global monetary systems?
A future where cryptocurrencies and blockchain underpin global monetary systems could yield both advantages and challenges. On the upside, it might promote financial inclusion by enabling access to financial services for the unbanked. Cross-border transactions could become faster and more cost-effective due to decentralized networks. The transparency offered by immutable blockchain ledgers might enhance accountability and reduce fraud.
However, volatility remains a significant drawback, as the unstable value of cryptocurrencies could hinder their adoption as stable mediums of exchange. Governments might grapple with regulatory challenges, striving to balance the need for oversight with fostering innovation. Additionally, security concerns are paramount, given the risks of hacking and the potential loss of private keys. Addressing these issues will be critical in realizing the potential benefits while mitigating the challenges of a cryptocurrency-centric monetary system.
In what ways could central bank digital currencies (CBDCs) built on blockchain impact the way governments manage their economies and interact with citizens?
Central Bank Digital Currencies (CBDCs) built on blockchain technology could reshape how governments manage economies and engage with citizens. These CBDCs offer governments greater control over monetary policy, enhancing their ability to influence financial stability and liquidity. Real-time fiscal policy adjustments, like immediate stimulus disbursements, become feasible, enabling quicker responses to economic fluctuations.
This technology, however, raises privacy concerns. While blockchain offers security, the transparency of transactions could challenge individual privacy. Striking a balance between privacy and regulatory oversight is a crucial challenge for governments. Moreover, CBDCs might transform the traditional banking system by providing citizens with direct access to the central bank, potentially reducing the intermediation role of commercial banks.
In summary, blockchain-based CBDCs empower governments with more dynamic economic tools, but they must navigate privacy trade-offs and potential disruptions in the financial sector. The shift to CBDCs requires careful considerations to ensure efficient and equitable economic management.
With the proliferation of stablecoins, how could these blockchain-based digital assets bridge the gap between traditional fiat currencies and the digital economy?
Stablecoins, like USDC and USDT, serve as a vital link between conventional fiat currencies and the dynamic digital economy. By maintaining a stable value equivalent to traditional money, they instill confidence and familiarity among users. Leveraging blockchain’s efficiency, these coins enable swift and borderless transactions, vitalizing cross-border trade and financial inclusion. Their transparent, auditable nature enhances trust and reduces intermediary dependency. As the digital economy expands, stablecoins offer a secure, accessible on-ramp, fostering seamless integration between fiat and digital realms, and driving innovation in payments, remittances, and decentralized finance, thereby bridging the gap between the two financial landscapes.
What role might decentralized finance (DeFi) play in redefining how we save, invest, and access financial services, all powered by blockchain technology?
Decentralized finance (DeFi) has the potential to revolutionize traditional finance by democratizing access to financial services through blockchain technology. It promotes financial inclusion by offering lending, borrowing, and trading opportunities to a global audience with internet access. DeFi’s disintermediation disrupts traditional banks, enabling direct peer-to-peer transactions and self-executing smart contracts, enhancing efficiency and reducing costs. However, challenges remain, such as smart contract vulnerabilities and the need for regulatory frameworks to ensure consumer protection and compliance. As DeFi continues to evolve, its role in reshaping saving, investing, and financial services could be substantial, ushering in a more accessible, efficient, and transparent financial landscape.
How could the integration of blockchain into everyday transactions influence concepts of privacy, security, and financial inclusivity on a global scale?
The integration of blockchain technology into everyday transactions has the potential to transform concepts of privacy, security, and financial inclusivity globally. Privacy-focused coins like Monero can offer enhanced transaction privacy, although concerns about potential misuse persist. The immutability of blockchain enhances security, as it reduces data manipulation risks. Financial inclusivity improves as blockchain eliminates intermediaries, enabling access to financial services for the unbanked. However, challenges arise from regulatory concerns, potential coin volatility, and security vulnerabilities. Achieving a balance between privacy and regulation is vital. In conclusion, while blockchain’s integration offers benefits like inclusivity and transparency, it also demands addressing challenges to fully harness its potential.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
