Transparency should be increased for mass adoption of Cryptocurrency
Cryptocurrency has provided a revolution in the world of finance and information, not only did it solve the problem with Centralized banking but it also opened up a whole new load of applications from being used as a payment system to recently adopted as a legal tender in El Salvador. Somehow even though it has provided transparency through the blockchain system, more transparency is needed for it to achieve its objective of mass adoption as a payment system.
Why more transparency is needed?
Cryptocurrency in itself is built upon a blockchain system. Blockchain has certainly come to fix the centralized banking system by providing transparency on every transaction made in a blockchain system. This information that was before concealed by banking is now available to people.
But although Cryptocurrency has provided the transparency required by people, there is still a lot of it that is missing. While the transactions are open to track in a public blockchain, it is quite difficult to link a person to the transaction. One way to tackle this issue is by doing KYC to assure the right legal people are using the system.
More transparency is also needed for stablecoins as although Cryptocurrency is not obligated to provide audit or transparency reports but if they want to be adopted as a payment system, they will have to able to prove their reserves like the recent problem with tether reserves which stated that it is backed by $1 for each coin but its audit report proves that only of 60% of it is in cash and cash equivalents.
How do we balance transparency and protect people’s privacy?
Although more transparency from Cryptocurrency is always good to hear, how to do that in a way that protects people’s privacy at the same time is a question.
Concordium is setting a prime example in trying to achieve the best of both worlds by telling its user to complete a KYC form but the data are stored in an encrypted form that can be decrypted only for official and specific mandates like court issues.
We in Nagaya Technologies believe in our vision to build trust and value through legality and transparency. The transparency and audit reports we provide to all our coin holders are a way to strengthen the trust placed on us. Our hope is this create a reliable and safe payment system of the future.
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