Fiat money is the most popular kind of money today. It is a kind of money that is not backed by anything. It rather derives its value simply from the laws of supply and demand and the stability of the issuing nation. Just like fiat and its electronic banking system replaced the systems before it, crypto banking is showing signs of the next revolution in banking. This makes for a strong case when comparing banking then vs banking now.
There have been different eras of money. There were times when the amount of certain precious stones you hold was used to determine your spending strength. At other times, commodities were considered money by exchanging them for other commodities. This was the barter system.
How Did Fiat Money Come About?
Before arriving at the fiat money system, the paper money produced by governments was backed by commodities. For instance, a government could mint gold coins that would be exchangeable for a certain amount in paper money, known as cash. This system has been abandoned since, with a wide adoption of the fiat system explained above.
From the onset, the fiat system was enabled by physical cash. The banks stored cash in their vaults and customers willing to use their money would make withdrawals before spending. Looking back, one would wonder how cumbersome a system that was.
The dominant cash system also came with associated risks, such as exposure to robbery. Imagine having to travel far with a huge amount of money. Many risks were involved, which led to various adaptations geared towards more convenience in using money, including travelers’ cheque.
The Arrival of Electronic Banking
While individuals bore the complexities in managing paper money, the task of balancing the books and managing transactions became tedious for the banks themselves. In the 1950s, the Bank of America developed the idea of using computers to handle checks and balance accounts. And that was the beginning of what we know today as electronic banking.
Instead of having to move cash around from one point to the other, these days banks simply exchange electronic signals and information. This is the system used to effect transactions and balance the books. It is today known as electronic banking.
Apart from the banks that are connected with themselves, the electronic banking system of today also connects banks to customers’ accounts directly. Merchants and Automatic Teller Machines (ATM) are also connected to the banks electronically. This is why remote banking has become very common, where individuals can settle their financial responsibilities without visiting the banks.
Blockchain Revolution in the Banking Industry
While considering banking then Vs banking now, we will not fail to identify the ongoing revolution that is being brought about by blockchain technology. Even though the concept of cryptocurrencies is yet to become highly adopted, some top banks are already implementing the technology behind it in some areas.
The peer-to-peer transaction system enabled by blockchain technology and its distributed ledger structure, are considered to be beneficial in the banking industry. Security, data management,immutability, and cost reduction are some of the elements that are endearing blockchain systems to the banking industry.
To extend this even further, innovations like tap have implemented crypto banking systems that offer control and convenience for users in terms of transactions. The tap app and card provides a robust banking solution that allows its users to store, trade and spend cryptocurrencies with ease.
As a payment settlement platform, you can make use of the tap systems, especially the tap prepaid MastercardⓇ, like any other payment card. You can pay online, at POS points, and even make withdrawals from ATM machines in every part of the world using the tap card.
On the tap app, you can manage your cryptocurrency portfolio effectively and also handle your transactions in a seamless manner. This is another method of electronic banking that is different from what we have in the mainstream. However, just like the money systems of the world have evolved over the years, everything seems to be pointing in the direction of crypto this time.
We have recently launched our alpha testing platform, and are inviting participants to join the waitlist to test the app and card services. Card services are only available to citizens of the EU. If you are interested in becoming a part of the initial test team, find more information here.
What has been holding the explosion of crypto banking into the seen future, apart from legal elements from the authorities, is appropriate product. But with innovations like tap, we can say that we are much more closer to adoption than many people would imagine. After all, adoption can be defined as a widely accepted application of a product, and tap is already on the verge of that.
We definitely have not seen the end of evolution in the money industry. Just as we have come through several eras, the era of blockchain and cryptocurrencies will also find a way to touch base. After then, it is still very likely for other eras to arrive as long as time permits. One thing that is certain is that emerging technologies will be the game changer between banking then Vs banking now.
It's only a few taps away.