What will happen to electronic money? – Maxim Kurbangaleev tells about its prospects in the financial market

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CryptoMode Maxim Kurbangaleev

Electronic money has firmly come into common use, allowing you to pay for purchases both online and offline. Due to the emergence of new technologies, the so-called “digital cash”, issued and controlled by the regulator, has become only a kind of electronic money. 

We have talked with financial expert Maxim Kurbangaleev to understand what prospects this means of payments has. Where is the financial system moving under international sanctions? Is it possible to fight money laundering with the help of new technologies?

Digital cash VS cryptocurrencies: Who will be the winner? — Maxim Kurbangaleev

“Electronic money” is an ambiguous term that can be interpreted differently depending on the jurisdiction or the characteristics of the financial system. Many experts agree that electronic money includes not only the cash that a person puts on their card or account (digital cash), but also money on non-fiat electronic wallets, cryptocurrencies and game currency. 

Cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, have gained particular popularity in recent years. Maxim Kurbangaleev believes that this trend will continue in the near future. “Cryptocurrency will soon completely replace not only physical, but also digital cash. Electronic money has caught on in the world, first of all, because of the ease of use. 

A user can make a purchase without leaving home, quickly and safely; and a business can expand its customer base beyond its city or even country, and, accordingly, sell a product or service faster. The use of classical electronic money by businesses and banks requires certain efforts, such as the development and integration of an API protocol, a database, the introduction of additional add-ons to meet the requirements of the regulator, and the solution of bureaucratic issues in the form of signing contracts and reporting. Cryptocurrency automates all these complex payment scenarios with just one smart contract. That is why I think cryptocurrency is our future.”

A smart contract is an algorithm created to make and maintain contracts that exist in the form of code in the blockchain. To make a transaction, you need to enter the conditions agreed by the parties into the program. The smart contract will automatically start tracking their implementation. At the same time, you do not have to involve lawyers or notaries, it significantly saves time and money.

Maxim Kurbangaleev: Topical issues in the world of cryptocurrency

Many market participants are worried about the regulators’ policy. They have recently begun to actively use various tools for AML (Anti-Money Laundering) verification. The regulators have started freezing funds on users’ wallets due to operations performed even before the introduction of verification technologies. Since the blockchain system stores information about all completed transactions, the regulator and law enforcement agencies can check saved blockchain and find out when there was interaction with prohibited services or suspicious wallets. 

An ordinary user may not have access to complete information (at least due to the lack of tools in a particular cryptocurrency network), so they may not know in which operations the currency that got into their wallet participated. However, such a user will be fully punished, after the fact. In such cases, the regulator does not provide either a statute of limitations or ways to protect users from such dubious funds. 

According to Maxim Kurbangaleev, the market situation clearly suggests that it is time to develop new measures. “Evolution exists not only in biology, but also in the financial world. In order to preserve the sphere of cryptocurrencies, the regulator will have to evolve, taking into account the needs of the industry,” says the expert. “Regulators from different countries should work together to test various methods of combating illegal schemes. Create a kind of sandbox”.

People are trying to fight money laundering in the cryptocurrency environment in various ways, but there is still no approved mechanism. These are a few basic recommendations, including:

  • Working only with those exchanges that conduct a KYC (Know Your Customer) check of all their customers. Trading with reliable traders will not make you worry about the purity of your cryptocurrency;
  • Avoiding cryptocurrency mixers, cleaners and other services that mix your cryptocurrency, because this significantly reduces the level of trust in the wallet;
  • Dividing your assets into two crypto wallets: “clean” for funds from verified sources and “potentially risky” for others. This will significantly reduce the risk of blocking all your funds;
  • Finally, the use of public services for transaction monitoring (Coinfirm, Chainalysis, AMLBot, etc.)

Maxim Kurbangaleev adds another valuable piece of advice to this list. “Do not be fooled by the instant earnings that you are promised in all sorts of illegal schemes. 

Make a strategic assessment, consider long-term prospects and you will understand that it is more profitable to engage in a real legal business. Look at the world-famous personalities, such as Mark Zuckerberg, Bill Gates, Steve Jobs, they are all inventors, creators, optimizers. There are no money launderers or drug dealers on this list, but only honest businessmen. They have created cool products that cover the needs of millions of people, and therefore their names have gone down in history. 

There are many talented specialists in the world, and I believe that if everyone focuses on solving their tasks as efficiently as possible, the world will be transformed. Therefore, I am categorically against inventing any bypass schemes. If you are offered such a thing, exclude this person from your social circle, they clearly do not wish you well,” sums up the expert.


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