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How Cryptocurrencies are Changing the Fintech Landscape

Despite the skepticism of many analysts and even senior bankers, cryptocurrencies are here to stay. They have become a reality that everyone should accept. The blockchain, upon which many cryptocurrencies are based, is built on the financial technology (Fintech) of blockchain. Generally speaking, financial technology is meant to help participants in the global financial sector, but blockchain is only one form of that technology. Payment companies such as Payoneer and Skrill, and open banking applications, are other examples of financial technologies that are disrupting traditional financial institutions.

Cryptocurrencies hastened the advent of blockchain

In today’s modern financial structure, cryptocurrencies and fintech go hand in hand. Bitcoin was the first known blockchain application. Several other cryptocurrencies followed suit, including Ethereum, whose designers have implemented change to Bitcoin’s underlying blockchain in order to improve its performance. The main issue was the slow performance due to the need for a proof of work in order to increase the security of the network. The blockchain still needs work, but cryptocurrencies are behind the advent of this promising technology, and they are still the main way the technology is used.

Blockchain optimists talk about the technology’s large potential. They expect it to disrupt not only the financial sector but other sectors such as humanitarian work, governance, the platform economy, and others. The technology is still yet to deliver on those promises, but there are high hopes for the future.

Cryptocurrencies are still just in the beginning phases

Cryptocurrencies offer alternative solutions to customers from various countries, but it seems that their value proposition is mostly pronounced in developing countries. In developed countries with sophisticated financial structure and stable currency and institutions, customers are not likely to find great value in them (unless they are investing or trading Bitcoin and other cryptos, not conducting financial transactions). Cryptocurrencies have become appealing in countries suffering from hyperinflation such as Venezuela. As the value of the bolivar went down, the attractiveness of cryptocurrencies became even more compelling. In this case, cryptocurrency played the role of a value holder.

Cryptocurrencies can have a positive role in the development of developing countries and emerging markets

In other cases, cryptocurrencies helped people send remittances. Many immigrants outside of Africa use cryptocurrencies to send money to their families and loved ones in their home countries. This has reduced transaction costs and helped make the whole process faster. In this case, cryptocurrencies have contributed to remittance fintech solutions.

Rise of mobile banking

Those remittances are connected to mobile banking, something that also has been on the rise recently, especially in countries where large proportions of the population do not have access to basic bank accounts. Mobile banking is a good alternative, and it is complemented by cryptocurrencies which do not rely on the central bank.

Financing alternatives

In addition to the above, cryptocurrencies have offered startups alternative ways of financing their ventures. Initial Coin Offerings (ICO) have recently become a trendy way to raise capital from crypto enthusiasts and investors.


There are several use cases for cryptocurrencies. Different use cases can give rise to different innovative fintech solutions that make people’s lives easier, particularly by giving them access to previously unavailable financial services. We can expect a lot more innovation and disruption in the upcoming years.