By Kamran Gasimov – For years, trade blockades have been used as a pressure measure. In such cases, all international economic activities remain frozen until a new order. These measures are frequently carried out to pressure certain governments and institutions to pay their debts or make certain decisions against their will. Many times, these measures have prompted important positive changes. However, while these measures are still in force, ordinary citizens face many difficulties.
Scarcity of basic products, inflation, operationstops due to lack of spare parts and more. These are some of the common effects during cessation of international inter-bank activities. In past, people had to flee their own countries to escape from effects of economic sanctions.
When inflation rises, the purchasing power of money goes down. For example, with the same money that you used to buy four apples, in the following month you’ll only buy two. If the situation gets worse, you’ll only buy one apple until finally you can’t buy anything.
Fortunately, nowadays, if people can not get money from banks, they can obtain it through the Internet, through cryptocurrencies and blockchain technologies.
In countries with alarming inflationary indices, cryptocurrencies have become a mechanism to protect the value of wages. In some places, the worst mistake you can make is to stay with the same money for a long time.
Many people buy Bitcoins with local currency and hope for the best so that their investment increases its value. However, due to the volatile nature of Bitcoin, these kinds of investments are always risky. However, many prefer to do this than to keep their money in local banks.
In many countries around the world, banks can’t carry out international transactions. Faced with the impossibility of receiving international currencies through local banks, blockchain technologies are the only hope.
International bank transactions are required to pay tax, as is the case with the SWIFT system, which uses payment methods such as MasterCard and Visa. If the amount of money is high, the tax is too. Many people who work in foreign countries only have the necessary money to send their families, so they prefer to escape from the banking system taxes and transfer their money as cryptocurrencies.
Then, the recipients convert the cryptocurrencies into local currency and obtain much more money than they would have received through the banks. Nowadays, the use of cryptocurrencies has increased incredibly in countries in crisis and more and more people open their own wallets to receive payments.
In the future, transactions based on secure blockchain technology will replace the current scheme. These technologies are less vulnerable to cyber attacks and information isn’t lost in the event of a server failure, as has happened in many banks.
The adoption of cryptocurrencies as an alternative mean of payment will allow many more people to know and implement them in their daily economic activities. In addition, it will be the best solution to control their volatile behavior.
Kamran Gasimov isanAdviser to the Chairman of the Board and Director of Creation of Bank Products and Development of Sales Channels at MuganBank OJSC. He alsois a Co-Founder and Development Director of Accounting and Tax Resources and the Founder and Director of Richmond Group.