ANALYZE THE RISE OF CRYPTOCURRENCIES AND THEIR

FINANCIAL IMPACT ON THE GLOBAL FINANCIAL SYSTEM

 PARTICIPANTS

1. M. Shahid Nazir (Finance)

2. Zill e Tooba (NST)
3. Aman Ullah (Design)
4. M. Waqas Arshad (Quality)
5. M. Ayub Ali (Logistics)
 WHAT IS CRYPTOCURRENCY???

Cryptocurrency, sometimes called crypto-currency or crypto, is

any form of currency that exists digitally or virtually.
Cryptocurrencies don't have a central issuing or regulating
authority, instead using a decentralized system to record
transactions and issue new units.
 History of CRYPTOCURRENCY

• The concept of digital currencies dates back to the 1980s, with

pioneers like David Chaum introducing secure electronic cash
systems like eCash.
• However, the modern era of cryptocurrencies started with the launch
of Bitcoin in 2009.
• Some of the other cryptocurrencies are:
Ethereum
Tether
Binance Coin
Solana
USD Coin etc.
Trend of CRYPTOCURRENCIES
 How does cryptocurrency work?

• Cryptocurrencies run on a distributed public ledger called

blockchain, a record of all transactions updated and held by
currency holders.
• Units of cryptocurrency are created through a process called
mining, which involves using computer power to solve
complicated mathematical problems that generate coins. Users
can also buy the currencies from brokers, then store and spend
them using cryptographic wallets.
 RISE OF CRYPTOCURRENCIES

The rising popularity of Cryptocurrencies can be attributed to the

unique opportunities it offers towards expanding people’s
economic freedom around the world. These opportunities come
from three main characteristics of cryptocurrencies;
• Accessibility
• The low transaction costs and speeds
• Countering corruption
 RISE OF CRYPTOCURRENCIES
ACCESSIBILITY
• The use of cryptocurrency is proving to be a valuable tool for
developing countries to solve issues associated with the lack of
accessibility to traditional financial systems.
• Cryptocurrency, unlike the traditional financial market, does not
need a physical infrastructure, it is readily available through
internet access.
 RISE OF CRYPTOCURRENCIES
LOW TRANSACTION COSTS AND TIMES
• The cost and time involved in transferring funds through
traditional financial systems can be prohibitive for both the
sender and the receiver.
• Cryptocurrencies are a viable alternative to the traditional
means of receiving remittances, and it enables quick and
low-cost international money transfers.
 RISE OF CRYPTOCURRENCIES
COUNTERING CORRUPTION
• The blockchains behind cryptocurrencies have created better
trust with users through their ability to fight corruption.
• As it is based on a distributed digital ledger, every transaction is
recorded and cannot be modified. Transactions are recorded
and cannot be reversed, which highly reduces the likelihood of
being defrauded. This also reduces the possibility of
manipulating transactions.
IMPACT ON THE GLOBAL FINANCIAL SYSTEM

• The Rise of Digital Assets

• Disruption in Traditional Banking and Finance
• A New Era of Financial Innovation
• Facilitating Cross-Border Transactions
 The Rise of Digital Assets
• Decentralization: Unlike traditional financial systems,
cryptocurrencies operate on decentralized networks, typically
blockchain technology. This decentralization offers advantages
like enhanced security, reduced risk of censorship, and greater
control over one's assets.
• Accessibility and Inclusion: Cryptocurrencies make financial
services more accessible to people worldwide, including those
without traditional bank accounts. This inclusivity has the
potential to revolutionize financial participation on a global
scale.
 The Rise of Digital Assets
• Innovation in Financial Services: The cryptocurrency space is
a hotbed for innovation, including DeFi (Decentralized Finance)
platforms that offer lending, borrowing, and earning interest on
cryptocurrency holdings without the need for traditional banks.
• Speculation and Investment Opportunities: The instability of
cryptocurrencies, while a risk, also presents significant
opportunities for speculation and investment. Many investors
are drawn to the potential for high returns, despite the risks
involved.
 Disruption in Traditional Banking and Finance

• Financial Inclusion: Cryptocurrencies are instrumental in

promoting financial inclusion by providing unbanked individuals
with access to digital wallets, allowing them to participate in the
global economy, save money securely, and access financial
services like loans and money transfers.
• Reduced Costs and Increased Efficiency: By eliminating
intermediaries, cryptocurrency transactions can reduce
transaction fees and processing times. This efficiency is
particularly beneficial for cross-border transactions, which are
notoriously slow and expensive through traditional banking
channels.
 Disruption in Traditional Banking and Finance

• Empowerment through Decentralization: Decentralization is at the

heart of the cryptocurrency movement, giving individuals more control
over their financial transactions and reducing their dependence on
traditional financial institutions, which may be susceptible to economic
instability, currency devaluation, and political interference.
• Innovation and Economic Opportunities: The rise of
cryptocurrencies has spurred innovation in financial services, leading
to the creation of new business models and economic opportunities.
This includes the growth of decentralized finance (DeFi) platforms,
which offer a wide range of financial services without the need for
traditional financial institutions.
 A New Era of Financial Innovation

• Since Bitcoin's introduction in 2009, cryptocurrencies have

sparked a global financial revolution, embodying
decentralization, transparency, and direct peer-to-peer
transactions. This digital financial evolution has paved the way
for new investment opportunities and economic inclusivity,
challenging traditional banking and financial systems with a
fresh, innovative approach.
Facilitating Cross-Border Transactions

Cross-Border transaction is a transaction where the sender and the

recipient are based in different countries.
Cryptocurrency streamline the cross-border transactions and offer a
multitude of benefits that are transforming international finance.
A report by the World Bank highlights that the average cost of sending
$200 across borders is about 6.5%, a figure cryptocurrencies
significantly undercut.
 Advantages of CRYPTOCURRENCY
• Removes single points of failure
• Easier to transfer funds between parties
• Removes third parties
• Can be used to generate returns
• Remittances are streamlined
• Decentralized in nature (not in Govt. control)
• Untraceable
Disadvantages of CRYPTOCURRENCY
• Lack of awareness and understanding
• Still developing
• Transactions can be fictitious
• Expensive to participate in a network and earn
• Prices are very volatile
• Not accepted widely
• Large risks of investing
CONCLUSION