Since Satoshi Nakamoto (the pseudonym of the unknown inventor of Bitcoin) launched the first cryptocurrency in 2009, thousands of people around the world have approached the world of cryptocurrencies, hoping to achieve the same economic success as the top cryptocurrency. Nevertheless, not all that glitters is gold: assuming and not granting that the hoped-for earning goals are achieved, there are still many problems related to volatility and the use of digital currencies in daily life needs (credits: Daniele Marinelli).
There will then be a need to convert cryptocurrencies into fiat currency, which means a kind of money made legal tender by a government or group of governments, such as the dollar, pound, or euro. Many exchange services can be found online, though beware of unregulated and risky ones.
Once the crypto money has been transformed into fiat currencies, you then have to bring those currencies back into the banking system before you can actually use them. Unfortunately, there are very few online services that allow this second phase, in other words, very few services that allow you to use the amounts converted into fiat currencies through commonly used instruments (such as debit cards) or wire transfers.
Talking about wire transfers, it is very difficult to find online services that allow the user to make a bank transfer to someone else; just a few of them allow one to transfer money from the exchange service account to one’s ordinary bank account. At this point, you may think about a double transfer, why not? For example, if you need to make a wire transfer to someone else using the transformed crypto coins, you may think of making a double transfer first to yourself and then to the third person: can you do that? Really, the answer is not so simple. There should not be usually any problems for small and occasional money transfers, but when it comes to larger and more frequent transfers, you could risk a series of reports or even the shutdown of your ordinary bank account.
Today, moreover, even the opposite flow is becoming more and more complex, i.e. withdrawing amounts from one’s bank or transferring them to an exchange service in order to be able to buy our first Bitcoin or Ethereum or other. The question therefore arises: why is it still so complicated to pass values in or out of the crypto world through banks? Daniele Marinelli, a roman entrepreneur, founder and CEO of DTSocialize Holding Ltd (which recently entered the process of Direct Listing at London Stock Exchange), gives us an interesting answer to that question. According to him, the main reasons for these difficulties are the followings:
- nowadays, we have no clear legislation regarding cryptocurrencies and regulations regarding their use;
- The cryptocurrency world is world that has also sometimes been used for illicit value exchanges and this conflicts with all anti-money laundering regulations (AMLD5). Since banking institutions have not yet equipped themselves with competent structures and professionals to verify the origin of the funds and their use, when in doubt they prefer not to risk and not to take responsibility;
- The high level of volatility of cryptocurrencies makes them more suitable for highly speculative investments that for ordinary people are difficult to manage and expose them to risks of fraud and large losses on the invested capital;
- In the traditional banking system, there are still many difficulties in quickly adapting to changes in technological models and management systems.
Yet, the ferment is increasingly evident. Although opinions differ as to how to implement this, the various Central Banks (ECB, FED, etc.) are fairly unanimous in their belief that there is no more time to lose and that banking institutions and governments must act quickly to create regulation. The risk is that, in the absence of general and uniform regulation and to which the entire banking system must conform, each central bank or government will act autonomously, generating a multitude of rules that could make it difficult to achieve global uniformity in the use of a new instrument, that instead focuses on globalization.
For sure, although everyone seems to agree that the future appears to be mapped out and that new technologies should be embraced and not avoided, we are still too far from this goal.
Among those who are trying to solve the problem that many cryptocurrency owners have (i.e. to be able to use the ordinary currencies derived from the sale of their cryptocurrencies, to be able to make SEPA transfers, or simply to credit their debit card and be able to make purchases and withdrawals at the ATM) is the roman entrepreneur Daniele Marinelli. He has decided to create a fintech company, DTSCB, which offers the possibility to open accounts where you can manage both digital assets (cryptocurrencies, tokens, etc.) and ordinary fiat currencies, being able to easily and quickly convert one into the other and then use the money within a more traditional banking circuit (Custody PRO Exchange service).
All in compliance with the anti-money laundering regulations, which include the identification of the beneficial owner and the origin of the funds. Daniele Marinelli hopes that this could represent a forerunner in this field, building a sort of bridge between the classic financial world and the new world dominated by accelerating technologies.