Can Blockchain Networks Replace Legacy Systems?

By Kapil Gauhar

The IMF (International Monetary Fund) recently announced the launch of “Learning Coin.” IMF is an organisation focused on promoting “global monetary cooperation for helping underdeveloped nations in achieving Millenium Development Goals as well as various other socioeconomic initiatives.

The International Monetary Fund will be working with the World Bank to create an application, particularly for the Learning Coin project. The app will let users access the educational blog posts and many other research materials which can be used for enhancing their learning as they attempt to understand better how Learning Coin, which is a quasi-cryptocurrency, works in real-world scenarios.

Christine Lagarde, the IMF head, recently stated –

“I think the role of the disruptors and anything that uses distributed ledger technology, whether you call it crypto assets, currencies or whatever-and it’s far from the Bitcoins we used to talk about a year ago-that is clearly shaking the system.”

In response to Lagarde’s statements, Dr. Martin D. Weiss, the founder and CEO of Weiss Cryptocurrency Ratings, said –

“In the world’s financial capitals, crypto still lives in the shadows of giant, established structures and infrastructure, with only minimal impact.”

However, he pointed out –

“In regions, where economic freedom is highly restricted, where the establishment is teetering on the brink of chaos, or where the masses simply have no access to financial services, the door is opening for disruptive technologies like distributed ledgers to fill the void.”

He continued saying –

“Right now, only those who truly need Bitcoin are willing to put up with the hurdles of using it. But as the technology and protocols evolve to become more user-friendly, we believe distributed ledger technology (DLT) will replace legacy financial infrastructure in much the same way the internet has overtaken telecommunications.”

Legacy System Facing Significant Scaling Issues

On being questioned about what we could expect from legacy players as the cryptocurrency industry evolves, Dr. Weiss noted –

“The choices will be to adapt or die. Traditional financial infrastructure could undergo a major DLT overhaul. Ultimately, financial service providers who do not use the technology could wind up in the same place as news organizations stuck in the era of hard copy.”

Elaborating on how the current financial industry is planning to integrate blockchain-powered systems, Dr. Weiss revealed –

“Already, the world’s legacy financial infrastructure is facing major scaling issues. It’s inefficient and slowed by a myriad of intermediaries. It’s unable to meet the demands of everyday people, especially those in emerging markets.”

As indicated by Dr. Weiss –

“DLT is the only known, viable solution. It has the potential to fling open doors to efficient financial services provided to anyone with a smartphone and an internet connection. It will democratize finance in a way world has never before experienced. And it’s hard to imagine a scenario in which DLT does not completely replace today’s financial infrastructure.”

‘Do-No-Harm’ – A Unique Approach

Responding to a question in regards to the development of regulations for digital currencies, Dr. Weiss recommended that the ‘Do-No-Harm’ regulations that set the basic rules offer the best model and metaphor. Still, legislators and regulators have some challenges ahead.

1. Understand the fundamental principles of Distributed Ledger Technology
2. Overcome their fears regarding how the technology may enable bad actors worldwide scene
3. Pass the legislation
4. Establish rules for better transparency to investors

Explaining how Weiss Crypto Ratings is making contributions to the cryptocurrency industry, the founder of the company noted –

“The cryptocurrency space currently suffers from an abundance of misinformation and a paucity of Big Data-driven research that’s objective and free from conflicts of interest. The Weiss Crypto Ratings are designed to help fill that gap.”