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Banking Royal Commission: Giving Up On Banks

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The Australian banking royal commission was established in December 2017. Commission intended to examine the practices of financial service providers such as banks and car finance companies. It has been investigating four major banks in Australia, among others. The commission discovered many cases of malpractice.

Many Australians became distrustful since the report went public. In his comment, an economist and Blockchain Innovation Hub’s researcher Brendan Markey-Towler said this is especially problematic in Australia because almost every payment is connected to the bank. The controversy resulted in a rising number of Australians who wanted to find an alternative way to manage their own finances.

Many people seem to be happy with Mr. Crabs solution to hide all their riches under their mattresses. If that’s not really an option for you, consider cryptocurrency, peer-to-peer lending and credit unions.

So what are the options?

Dr. Markey-Towler said that technological advancement offered some alternatives. His only advice was to be smart and careful. Every choice has its advantages and flaws so everyone should choose something that suits them best.

ASIC Moneysmart’s executive Laura Higgins agrees with Markey-Towler. She declared that young people are searching for innovative ways to manage their finances. She also finds refreshing and “inspiring” that young people are looking further than traditional ways when it comes to finances. Some of the alternatives are cryptocurrency, peer-to-peer lending, and credit unions.

Cryptocurrency

Dr. Markey-Tower said he believes that in the not-so-distant future we will be able to pay our usual morning coffee, for example, with a Bitcoin.

He explained that many people mistake the terms of blockchain and cryptocurrency. Cryptocurrency is actually based on the blockchain technology. According to his words, everyone in one network has a certain amount of purchasing power. When you want to transfer that purchasing power, you use that network’s related currency. And blockchain works like a bank record, tracking the amount of everyone’s purchasing power on that network.

Dr. Markey-Tower claimed that the regulations are the only thing slowing down the process of cryptocurrency becoming widely used every day. Laura Higgins agreed and added that the exchange platforms in cryptocurrency business need better regulations. Therefore, the risk is still high but will keep stabilizing as we progress further.

Peer-to-peer Lending

Instead of lending money from the bank, you may lend directly from a peer. Dr. Markey-Town stated that platforms that connect a borrower directly to a lender have recently been in demand. Laura Higgins added that ASIC regulates this matter and mostly requires licenses. Even though it seems the lenders are in favor, Higgins highlighted that this way borrowers may find a lower interest rate.

You should always ensure a few things if you’re having a peer lender for your business. The lender needs to have an Australian Financial Services License so you could be protected by law. Also, always check twice the “small letters in the bottom” and ask about the interest rate. That way you’ll protect yourself from many potential risks, for example, from an exorbitant interest rate.

Credit Unions

Higgins suggested that credit unions may be a good choice since they are as safe as banks. Customer-owned banks have different responsibilities than shareholder-owned. Since 2015, there were 4 million clients in 93 customer-owned banks. They included credit unions, building societies and mutual.

There were have been some bad experiences with credit unions due to acquisitions. Clients who exclusively want a customer-owned bank can be disappointed if the small bank merges a couple of times. Then it becomes a big one that they intended to avoid.

In the end, Laura Higgins advised always to check your financial plans now and then. Maybe they don’t suit you any more or there’s a better option somewhere else.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

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Altcoins

CoinFlip Scores Big with BRD Wallet Partnership

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As the crypto markets move closer to mass adoption, one of the keys for future success will revolve around attracting as many market participants as possible.  While many crypto users are extremely tech oriented, a lot of those on the sidelines are not.  The cause of waiting on the sidelines could be due to a variety of reasons such as fear of the unknown, lack of knowledge, age, or a combination of all of the above.  In order to entice new users to join the crypto revolution, crypto ATMs are rising up across the country.  Of those, the largest and most influential crypto ATM company by a significant margin is CoinFlip.

In early October, CoinFlip announced on its Twitter that it had officially partnered with BRD Wallet to re-introduce their crypto ATM map.  Now, BRD wallet users will be able to locate their nearest CoinFlip ATM and receive a 10% discount for both buys and sells.  BRD brand awareness is growing quickly within the crypto community thanks to its innovative and entrepreneurial spirit.  The team strongly believes in the value of financial freedom and independence, and want to empower people across the world by leveraging the possibilities that Bitcoin and other cryptocurrencies provide.

Cryptocurrencies are already making a huge difference around the world.  Citizens of Venezuela, a country devastated by rampant inflation, have been using several cryptocurrencies…

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Cryptocurrency Collateralized Debt Positions Are Growing in Popularity

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While Bitcoin (BTC) continues to hover around the magical 10,000 price level, altcoins continue to fight an uphill battle.  Simply put, hopes of a future bull run continue to diminish as Bitcoin maintains its dominance.  One school of thought is that a few altcoins will survive and flourish, but which ones are anyone’s guess.  That being said, it’s hard to go wrong picking against the top coins like Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and EOS.  These projects have managed to find a foothold in the market and have a better chance than most of staying there.  While traders wait for their positions to increase in value, one opportunity that may be worth looking at is initiating a collateralized debt position.

What is a Cryptocurrency CDP?

In traditional terms, a CDP is essentially putting up collateral in order to receive a loan against the deposited amount.  There are several examples of this in our day to day lives.  Auto title loans from large companies like TitleMax are extremely popular with consumers.  Consumers are essentially able to use their car as collateral in exchange for a cash payment which can then be used for whatever needs the consumer has.  The consumer can continue using their car as long as debt payments are made.

The same concept applies to cryptocurrency CDPs.  Consumers are able to put up crypto tokens, such as…

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Altcoins

Hodium Presents a Compelling Opportunity for Outsized Investment Returns

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I’m sure all of us remember the cryptocurrency glory days of 2017 and early 2018.  It was one of the biggest bull runs in history and created incredibly wealth for quite a few early entrants.  Unfortunately, for most of us, those gains have most likely been wiped out during the altcoin apocalypse.  The truth is that traders probably thought a bit too highly of their trading abilities when the reality was that anyone could have thrown a dart at a board and ended up making money.

As markets mature (and the crypto market is definitely maturing) it becomes more and more difficult to generate alpha.  In that regard, it’s similar to traditional financial markets.  I can remember trading during my high school days.  It was the late 90s and right in the middle of the dot.com boom.  Eventually, however, the euphoria fades away and reality hits hard.  Now, it’s become rather difficult to actually trade profitably which has given way to the rise of hedge funds.

Hedge funds are investment funds that pool capital from accredited and/or institutional investors and invest in a variety of assets, often with extremely complex portfolio-construction and risk management techniques.  The professionals employed by hedge funds are the best of the best and have spent years honing their craft.  That is why they’re able to make the millions of dollars that they normally…

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