Cryptocurrencies and Their Potential Use in Disruption of International Financial System

Running head: CRYPTOCURRENCIES AND DISRUPTION OF INTERNATIONAL
FINANCIAL SYSTEM
Cryptocurrencies and Their Potential Use in Disruption of International Financial System
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2CRYPTOCURRENCIES AND DISRUPTION OF INTERNATIONAL FINANCIAL
SYSTEM
Introduction
The current study has the intention to examine cryptocurrencies and the way
cryptocurrencies can prove to be potentially disruptive in the area International Financial
System. However, due to considerable importance, the study at hand concentrates on
specifically Bitcoin, the way the same transfer value and manner in which markets of
different categories get disrupted. The study at hand aims to throw light on adoption of
advanced technologies, innovative products developed out of the same (referring to digital
assets otherwise cryptocurrencies and similar methods of value exchange. Essentially, this
study concentrates on the way these mechanisms are functioning towards dramatically
altering the way transactions are undertaken in everyday life and thereby adversely affecting
the entire financial system.
Context of the research
Cryptocurrency that refers to a new generation of internet based currencies have
developed in popularity over the past few years. Cryptocurrencies such as Bitcoin, Litecoin
and many others can be said to be encrypted currencies in digital form. A specific
characteristic of these specific currencies is that they are essentially decentralised while
majority of conventional currencies are mainly controlled by a particular centralized
government 1 .
In particular, digital currencies are essentially generated and at the same time
transacted in open source surroundings in which they are essentially controlled and
supervised by different codes and depend on specific peer-to-peer networks2.
1 W BUCHANAN, CRYPTOCURRENCY AND BLOCKCHAINS, in , DULLES, STYLUS PUBLISHING, 2018.
2 L Cocco, G Concas & M Marchesi, "Using an artificial financial market for studying a cryptocurrency
market", in Journal of Economic Interaction and Coordination, vol. 12, 2015, 345-365.

3CRYPTOCURRENCIES AND DISRUPTION OF INTERNATIONAL FINANCIAL
SYSTEM
Cryptocurrencies such as bitcoin have generated a novel market where, unlike the present
financial system. No single business enterprise has entire control.
Bitcoin, Ethereum and Litecoin among many others keep on experiencing massive
rate of growth in terms of price, capitalization in market and mainstream implementation.
Cryptocurrencies are presenting features as well as functions that are altering. Essentially,
cryptocurrencies are necessarily challenging specific dollar standard, eradicating middleman
and simplifying the entire process of crowdfunding process3. The middle men present in the
process of payment processing, cryptocurrencies are generating a huge disruption to the
entire worldwide payment mechanism. It can be hereby mentioned that one of the primary
reasons for centralised payment processing protocol is to prevent financing for money
laundering, terrorist actions, and illicit trade in essentially drugs as well as ammunitions4.
With cryptocurrencies, this becomes much harder to outline business transactions and
determine specific identities of different participants. Impact of block chain technology
asserts cryptocurrencies and cryptocurrencies present a host of different advantages5.
A number of cryptocurrencies along with block chain technologies also disrupt
finances of the economy by affecting speedy movement of money (instantaneous movement),
secured system of disbursement, low amount of taxes and fees, presentation of detailed
records and inadequate rate of exchange6. Therefore, this study intends to examine the effect
of cryptocurrencies and their potential usage in disruption of International Financial System
Primary Aim of the study
3 L Cocco, G Concas & M Marchesi, "Using an artificial financial market for studying a cryptocurrency
market", in Journal of Economic Interaction and Coordination, vol. 12, 2015, 345-365.
4 J Fry & E Cheah, "Negative bubbles and shocks in cryptocurrency markets", in International Review of
Financial Analysis, vol. 47, 2016, 343-352.
5 D Lyubshina, "Cryptocurrency as an innovative tool of world trade", in Interactive science, , 2016.
6 J Maupin, The G20 countries should engage with blockchain technologies to build an inclusive, transparent,
and accountable digital economy for all, in .