Traditional finance and cryptocurrencies are still very different in a lot of ways. This could change, though, if checks were done to see where the money came from and other new ideas were tried. It would help if you explored the better options available in the market, like cryptocurrencies and, more importantly, bitcoin on bitcoin-profit.com.
The European Parliament passed a law in January 2022 that makes it easier to find where digital assets came from. This was done to cut down on the amount of money that went into the EU illegally. This was a big step toward combining traditional finance and cryptocurrency. But what can traders and investors in cryptocurrency do to make their money look more natural?.
How do you figure out where the money came from?
By using blockchain technology, everything can be clear and easy to keep track of. But banks are still a long way from accepting your history of transactions as proof that you got your cryptocurrency legally. The main reason is that people can hide their identities more efficiently with technology like distributed ledgers. Your bank needs to find out for sure who owns these bitcoin wallets. Because of this, they can’t prove that your assets are tangible.
This need can be met by companies like Coinfirm that do complete Source of Funds checks and report on them. Since a long time ago, a company called Coinfirm, which does analytics, has been working in blockchain. Their newest report is called “Source of Funds.” With this report, customers can check to see if the money they used to buy digital assets was legal.
Every transaction that goes into or out of a customer’s bitcoin wallet during a Source of Money check is recorded. The check will then figure out where the money came from. But you shouldn’t think a bank teller will do something like that.
Trying to get rid of the term “criminal behavior”
Myths that have existed since the beginning of the blockchain industry are still holding it back. People thought that “criminal behavior” was linked to all crypto assets, no matter where they came from. But when it’s time to get a loan from a bank, say for a new house, these funds are often turned down.
Even though it will take a long time and be hard to get everyone to use it, there are ways to move in the right direction, like checking where the money came from. There are still a lot of myths about cryptocurrencies, but more people than ever are investing in them.
On the other hand, they have more in common than you might think at first glance.
Both traditional financial institutions and cryptocurrencies depend on network effects as well. As more people use cryptocurrency and conventional financial systems, their values increase. Both traditional banking and cryptocurrency are made to make it easier for people to trade money. If more people use each system, they will be more helpful.
In the end, cryptocurrencies, TradFi, and DeFi all have different rules. Governments have tried for years to figure out how to control cryptocurrencies and the average person who uses them, but they have yet to be able to do so.
Because of this, some places have made it illegal to trade in cryptocurrencies (as in China). In other cases, it has caused tax rates to be very high (as in South Korea). On the other hand, there are strict rules for traditional finance everywhere. There are many ways to follow the practices of this law, but almost all of them involve getting a license and filing a report.
Even though bitcoin and digital assets generally have some similarities, they are very different from TradFi.Crypto can only work as a decentralized system if there are digital assets. TradFi, on the other hand, is a controlled system that uses fiat money to exchange.