The Impact of Cryptocurrencies on the Fintech Employment Market

The Impact of Cryptocurrencies on the Fintech Employment Market

by January 5, 2022

The financial technology space is likely to be positively impacted by the adoption of cryptocurrencies. It’s believed that decentralized finance will form some portion of the economic landscape in the future. Crypto trading continues to gain traction throughout the globe, as increases in volume and more acceptance in the institutional arena will provide a more stable and less volatile market.

Who is Adopting Cryptocurrencies?


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There are two distinct areas of the cryptocurrency markets attracting new users. People who view cryptocurrencies as investments and people who use cryptocurrencies to spend. The investment landscape is growing at an accelerated rate. Not only can you perform crypto trading using a wallet that accepts your digital currency, but you can also trade cryptocurrency as CFDs, ETFs, and futures contracts.

Cryptocurrency CFDs are contracts for difference that allow investors to trade the price of cryptos through their CFD broker as the CFD tracks the price movements of the most popular cryptocurrencies.

Cryptocurrency futures tract the movements of cryptocurrencies but do not provide access to digital currencies. In the fall, the U.S. SEC approved the release of a cryptocurrency ETF in the United States, which tracks the movements of cryptocurrency futures contracts.

The adoption of crypto trading for investment purposes continues to spread to large institutions which can now trade ETFs and futures contracts. The adoption of spending cryptocurrencies for goods and services seems to be increasing in areas where the sovereign currency is unstable. For example, in Venezuela, the precarious nature of the bolivar has allowed cryptocurrency currency spending to grow as it is a more reliable option.

What Types of Fintech Opportunities Will Crypto Trading Provide?

As the acceptance of cryptocurrency spending grows, the need for access to digital wallets will need to be improved. One of the benefits of using a digital wallet to move cryptocurrency is that fewer layers of bureaucracy are required to transfer money even within the same country. Despite the benefits of crypto trading using a digital wallet, fintech innovation will need to reduce fraud within the crypto trading space. In 2021, Americans lost millions of dollars to crypto scans and need tools to help avoid fraud. According to the Federal Trade Commission in the United States, more than 7,000 people reported losses from crypto trading more than 12 times the volume of scams during the same period a year ago. The average loss of cryptocurrency scams in 2021 was approximately $2,000, and most of the people targeted with scams were people in their 20s and 30s. Most of the scams surround fake cryptocurrency exchanges.

Scams occur throughout the entire investment landscape. In the case of cryptocurrency scams, it will be incumbent upon the cryptocurrency exchanges and wallets to provide fraud protection otherwise, and they will lose the opportunity to accept these new digital coins further.

Fraud protection, identity theft protection, and reporting mechanisms will be areas that require fintech employment. Additionally, crypto trading opportunities will be needed to help firms exposed to cryptocurrency hedge their risks. For example, sovereign risks are currently hedged by central banks, commercial banks, and corporate treasurers across the globe. Suppose crypto trading begins to take the place of sovereign currency trading. In that case, there will be a need for expertise amongst crypto traders and analysts to help with the transaction process.

Proof of Work and Proof of Stake

Fintech jobs will be needed throughout the blockchain environment and other mechanisms to generate digital coins. The blockchain is the means through which many cryptocurrencies are exchanged. The benefits of this decentralized system are that each transaction is approved, and the traded cryptocurrency coins are never duplicated. Two main methods ensure that crypto trading is monitored and legitimate. The first is a proof of work method. This process is used on blockchain cryptocurrencies like Bitcoin and Ether. Each transaction is validated by a miner who solves a mathematical puzzle to prove that the transaction is new. There will be a continued need for miners to handle this function if proof of work continues to be the preferred method of adding transactions to a blockchain. A second method is proof of stake. Here, someone who owns a significant cryptocurrency can approve a transaction.

The Bottom Line

Further acceptance of crypto trading will likely require additional job opportunities in the decentralized finance space. The job opportunities probably include help with cyber security and fraud and educational information on scams. There will be a further need for those who will assist in the proof of work and proof of stake process. As more countries worldwide use cryptocurrency as opposed to sovereign currencies, there will be a further need for research on how to hedge exposure in the cryptocurrency market.


Featured image credit: Photo by RODNAE Productions from Pexels

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