The start of 2023 has investors and enterprises apprehensive in matters pertaining to the global economy. Institutions around the world reported heavy losses owing to fed rate hikes, inflation, supply chain disruptions, the European energy crisis and more. HashCash Consultants and PayBito CEO Raj Chowdhury highlighted the negative impact of institutional arbitrage, and proposes a conscious switch towards frameworks immune from human tampering.
The act of arbitrage is controversial, with powerful global corporations often shifting decisions in their favor with the help of strong political influence. They hold considerable sway in yielding desirable outcomes and bypassing market, societal and environmental regulations, both directly and discretely.
The HashCash chief identifies the fallacies present in the present monetary mechanism, stating, “The current monetary system is fraught with political influence and institutional arbitrage. This system created economic crises, financial exclusion and distributed more wealth to the wealthy. Let’s put our faith in a mathematical framework free of human vice.”
The framework refers to cryptocurrencies like Bitcoin and its underlying blockchain technology. Rising as one of the most disruptive technologies of the present era with a seemingly endless scope of applications, blockchain has been adopted heavily by virtually all major players in the BFSI sector. The response has, however, not been the same for digital assets, with detractors citing recent exchange crashes, stablecoin fallouts as reasons for not banking upon crypto. On a side note, a majority of developing or already developed nations are either developing or conducting research on Central Bank Digital Currency(CBDC). The PayBito CEO has said earlier that regulation, not prohibition or heavy taxation is what’s necessary for the crypto ecosystem.
A recent World Economic Forum meet was held at Davos with the objective of reinforcing collaboration across a fragmented world. It has been found that several corporations transfer and conduct a notable portion of their most profitable value-addition activities offshore, including European financial centers, to avoid taxation, rules and responsibilities. Corporate arbitrage thus creates significant economic consequences, even for developing nations. Meanwhile, institutional arbitrages, while highly profitable, were also partially responsible for the 2008-09 global financial crisis, where institutional investors allocated capital in complex investment strategies and financial instruments.
PayBito, a US-based crypto exchange developed and maintained by HashCash Consultants, has been a frontrunner in integrated crypto-forex technology, having deployed solutions in over 26 countries. The digital assets marketplace helmed by Chowdhury won global recognition as a top-provider of crypto exchange technology. PayBito has been the first in the world to integrate ChatGPT AI in its trading architecture and started a white label crypto broker program to democratize brokerage services at nominal monthly subscription.
The extent of corporate influence in monetary decision-making has increased worldwide, and this has led to fragmentation and a lapse in trust. It is vital to have a robust framework that promotes financial transparency and inclusion, rather than alienating everyone in disproportionate wealth distribution, without human intervention.
About Raj Chowdhury
Raj Chowdhury is the Managing Director of HashCash Consultants and Paybito. Raj pioneered the first interbank Trade Finance and Remittance implementation of Blockchain Technology between two of the largest global banks. Raj is an eminent voice in the Blockchain and Cryptocurrency space and actively engages with policymakers in this area. He is a contributor to Economic Times, Business World, CNNMoney and advises industry leaders in the adoption of Blockchain. He is a member of Asha Silicon Valley, a nonprofit committed to education for children in emerging countries. Author of the book ‘The Dark Secret of the Silicon Valley’, Raj is an investor in blockchain and cryptocurrency companies and an active member of the philanthropic community.