THE BLOG

New Politics, New Banking, New World

16/01/2017 17:31 GMT | Updated 16/01/2017 17:32 GMT

Anti-establishment sentiment has been sweeping across the world last year; with the UK voting to leave the European Union in June, the rise of Marine Le Pen and the Front National in France, Norbert Hofer and the Austrian Freedom Party's close loss in the Presidential election, Golden Dawn in Greece, and the US electing the ultimate 'anti-establishment' candidate Donald Trump as their new President-elect.

For the fintech industry, disruption of the established order is nothing new of course; revolution and innovation have always been at its very core. With conventional banking, many third parties have sight of, and access to, a person's financial and personal information throughout a transaction, which comes with its own associated costs and privacy issues. What should we expect in 2017?

Visionaries in this sector have long imagined that things could be done differently and done better. Digital currencies have therefore offered a genuine alternative to traditional banking and payment systems, cutting out charges and intermediaries.

It has certainly been an interesting time for the global economy; but for all the doom and gloom and talk of market volatility, we should not forget that recent historic events present an opportunity that we can capitalise on. London-based Bitcoin wallet provider 'Blockchain' has opened its 10 millionth digital wallet, making it clear that Brexit and Trump have done little to damage the digital currency sector. In fact the new world order has had a rather positive impact on digital currencies so far.

We have already seen examples of an increase in trading of digital currencies in light of failing fiat currencies; in both Greece and China individuals turned to Bitcoin, hedging against economic uncertainty in their respective countries.

While global currency markets plummeted following the Brexit vote, digital currencies bucked the trend with Bitcoin soaring in value. It seemed, perhaps unsurprisingly, as if people were turning to digital currencies as a safety net. Prolific Bitcoin investor, Barry Silbert, even remarked that this was the advent of Bitcoin coming out as a global safe haven for investment.

Equally, while many have mourned the shock of Donald Trump's election win, those in the digital currency industry were quietly watching the value of digital currency start to soar. On the 13 December Bitcoin was trading at its highest price since 2014 at just over $788. While people have often levelled criticism at digital currency as a very volatile platform, its decentralisation means that it's more protected from these specific political incidents in individual countries.

Denmark-based Saxo Bank found that it's this protection from country specific monetary policy which makes digital currencies so popular. "Cryptocurrencies are here to stay given the history of booms and busts in fiat money and debt excesses" said Saxo Bank's global macro strategist, Kay Van Peterse. "Emerging market powers eager to move away from being tied to the monetary policy of the U.S. and the banking system as well as to adopt the block chain as a payment system prove willing adherents as they adjust to zero interest rates and the decrease in systematic risk."

The anti-establishment tide across the world isn't just restricted to the world of politics; it's also sweeping away traditional fintech and allowing digital currencies to flourish.