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Can Crypto Credit Cards Disrupt the Fight Against Financial Crime?

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It is commonly known that the world of finances has the biggest problem with the crime of all existing industries around the world. It has been so throughout history. While the financial world has evolved, so did the criminal activities, and they continue to be an issue. With the arrival of cryptocurrencies, many were hoping that financial crime might be disrupted. However, for now, at least, it appears that cryptos themselves cannot find a way to resolve issues such as international money laundering.

In fact, when it comes to money laundering, the crypto sector appears to be the weakest link, especially because of the nature of digital currencies. The anonymity that cryptos are being praised for means that anyone can get a payment from an unknown source from anywhere in the world. This method can then be used for financing drug trafficking, cyberattacks, terrorists, and more.

Until recently, it was not easy for bad actors to make use of cryptocurrencies obtained for illegal purposes. The number of merchants willing to accept the coins was low, and criminals were forced to find a way to exchange crypto into fiat currencies. However, this came with a set of issues, such as taking foreign exchange risks and then sending the money through wallets and exchanges to a banking system that would allow withdrawal. The banking account was the biggest obstacle here, as it was more difficult to get than opening a crypto wallet, which only requires an internet connection and a few minutes.

The situation has not changed that much, and even these days, criminals are still limited when it comes to spending money in its crypto form. However, large cash-outs by bad actors can be troubling for the crypto industry itself, as it can start a bearish trend that could, once again, crash the crypto market.

Visa’s new move might change things

All of this is something that might change soon, as Visa plans to start offering crypto-funded debit cards. Visa is, by no means, original when it comes to the idea. There were many others that attempted to bring crypto credit and debit cards in the past, but their efforts resulted in failure as they could not comply with regulations.

In Visa’s case, however, things appear to be different. The company’s recent cooperation with Coinbase seems to be directed at bringing a UK crypto card, which will allow users to spend their money directly from wallets. What’s more — they will be able to do so at any location where Visa cards are accepted, which at this point includes pretty much the entire world.

Not only that, but the card’s spending limit is expected to start at £10,000 per month, and grow to £20,000 for certain users.

Regulatory compliance remains an issue

Of course, all of this still requires answers to a few questions, such as — how did Coinbase go about satisfying KYC and AML regulations? There is no doubt that the regulatory environment regarding digital currencies is evolving — and has been for quite a while. Even some wallets managed to find a way to satisfy regulations and comply with the rules, which brought support from the regulators. They are still in the minority, of course, and criminals can still use most wallets without oversight, but the situation does appear to be changing for the better, in this regard.

Even so, with the majority of wallets still not being compliant with regulations, anyone who uses Coinbase could potentially get a payment from illegal sources with nothing to stop them, and with no punishment. But, Visa points out that Coinbase is regulated by the US authorities, and that the partnership between the two is subjected to enhanced scrutiny.

Coinbase itself fights against the issue by blocking accounts that are involved with suspicious activities. However, that would still require that the company notices suspicious activities in the first place. The nature of cryptocurrencies is the real issue here, as even if all exchanges and wallets implement KYC procedures, cryptos still remain mostly anonymous. The only real way of preventing illegal transactions would be to block payments that come from unregulated wallet accounts. However, this would go against everything cryptocurrencies stand for, not to mention that it would come at huge costs.

Additionally, even real, traditional banks have seen such issues, as there are many of them in countries with less strict regulations that might not be compliant with regulations. If the banks have found this issue too difficult and expensive to deal with, how can the crypto industry deal with it?

Crypto institutions will have to find a way to become compliant with regulations if they wish for Visa’s plan to become a reality. Otherwise, the last several decades of the fight against financial crime would simply be erased, and major consequences could come as a result.

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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

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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Altcoins

KaratGold Proves Its Business Model By Providing Official Documents

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There has been a lot of renewed enthusiasm in the cryptocurrency market thanks mainly to Bitcoin’s strong move about 10,000.  Although Bitcoin continues to show its dominance, the altcoin market has yet to benefit from that rally.  A few of the largest altcoins remain popular but the rest of the market continues to lag behind.  In 2018, there was a lot of talk regarding a possible altcoin apocalypse where only the strong would survive.  That prediction appears to be playing out as expected.  Going forward, only the best projects that have a real world need will survive.  Crypto traders will have to spend a lot of their time doing proper research in order to find the best opportunities, just like in all financial markets.  One promising project that appears to have the makings of a future winner is KaratGold Coin.

KaratGold Background

KaratGold Coin is a cryptocurrency developed by the reputable German company Karatbars International, which maintains a leading position in the market of small gold items and investments. The project is part of a larger ecosystem, which involves several blockchain solutions that can be used for transactions, communication, investing and other tasks. During the past few weeks, however, the KaratGold ecosystem has been a target of unsavory scam allegations.  

Karatbars International and GSB Gold Standard Banking Corporation…

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