Blockchain-Based Financial System — Are we ready?

SmartCredit.io
Mar 26 · 8 min read

Introduction

The coronavirus has caused an economic shock and has been the trigger for the S&P 500 crash. However, as pointed out in the previous article, we think this will not be a “V style” shock with a fast decline and fast recovery, but it will be rather “L style” shock with the fast decline and slow recovery.

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Which way to go?

Analysis of the current financial system

In every financial system (including our current financial system) we do need the following components:

Current status of the blockchain-based financial system

The blockchain-based financial system has emerged with the crypto-currencies, wallets, tokenization, asset transfers, exchanges, lending.

What’s next with the current financial system?

The current financial systems and credit systems are overstretched because of the low-interest rates since the 2007/2008 Lehman crisis and the continuous worldwide Quantitative Easing.

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Base Worldwide Base-Money growth (https://cryptovoices.com/basemoney)

Migration from current financial system to the alternate financial system

What is the solution?

Summary

Our current overleveraged financial system faces black swan event from the coronavirus crisis. At the current moment, it’s not clear how much the financial system will survive the initial deflationary shock, which will be followed by the inflationary shock.

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