Blockchain involves the arrangement of records in a chronological manner using blocks which are linked to one another using cryptography, cryptography is concerned with communication security which involves confidentiality, integrity, and authentication of messages.
Forex (foreign exchange) can be described as the exchange of one currency for another, Forex is mostly concerned with the exchange of one Fiat currency for another e.g. Dollar for Pounds, Euro for Yen and so on.
A Quick Background Peek
Exchange before now was limited to goods, services. From the trader by barter era, goods were exchanged for goods down to the introduction of Gold which became the tool for exchange, to the creation of paper money (Fiat) which was generally accepted as a tool for exchange.
Foreign exchange emerged as a result of the need to ensure stability in the value of money held by individuals. In times past Fiat was exchanged for Gold which was a more stable measure of value, recently the case is not so as persons now prefer exchanging their currency for others with a high value in the international market.
Therefore, individuals now choose to convert their monies to currencies that are relatively stable over a long period, thus leading the practice of Forex. As a result of this practice, the Forex industry has grown at an exponential rate and recorded to be the largest financial exchange market with a cap of $5 trillion on a daily basis.
The invention of blockchain technology which has experienced successful use cases for example in health care, the use of blockchain technology has helped to encode and store data which has greatly reduced the cost of data storage and allowed for a more transparent system.
The Forex market over time has been associated with an inefficient and complicated transaction process, adopting blockchain technology would solve most of these issues.
This is where FXPay comes in.
FXPay is a highly prospective business opportunity that intends to integrate innovative technology which is blockchain to the foreign exchange market.
PROBLEMS ASSOCIATED WITH THE FOREX MARKET
The following problems were experienced in the forex market for trading currencies which include:
Exchange of currencies e.g. Dollar for Pound is a complicated process, exchanging one currency for another can sometimes take multiple days.
High transaction fees, in a situation when an individual wishes to exchange one currency for another, the fees incurred ranges between 5-7 % of the total transaction involved.
Barriers to entry for new and crypto investors, the intricacies involved in the market acts as a barrier to entry for crypto new investors which make it unattractive to investors.
FXPay's Proposed Solution
The following solution is what the FXPay platform aims to provide for the Forex market, they include:
FXPay introduces blockchain technology to the Forex market which provides a solution to the inefficiencies involved in executing transactions, offering a digital currency called FXP tokens traders can easily convert Fiat currency to its token (FXP).
The use of blockchain technology encourages reduced fees and faster time of transaction which result in increased profit margins and investment for potential traders.
Money is saved by brokers when transacting with liquidity providers (forex exchanges) on the FXPay platform.
FXPay provides an attractive investment opportunity for crypto investors as they can now choose to trade in the Forex market. Their tokens can be used as a hedging tool in the case of high market volatility, crypto traders can exchange their currencies for the FXP token which is more stable as a Fiat alternative pending when the market stabilizes.
Brief Thought
FXPay intends to provide a gateway the world’s digital ecosystem by the integration of blockchain technology to Forex trading.
Author by: Hellokitty6
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