Nader Sammouri

OSAKA: Paper money holds its value because many people believe it is backed up with commodities. Cryptocurrency is the latest to hold such value to people.  

Faizan Akhtar, born and raised in the UAE, is a financial controller at CoinMENA B.S.C ©. He works in a regulated cryptocurrency exchange medium while building a tokenized asset portfolio. He compares today’s cryptocurrency waves with the rise of the internet back in the 1990’s saying:

“Although I cannot ascertain the subsequent fact, the amount of people using cryptocurrencies today is similar to the number of people who started using the internet back in 1997. The world may be at an emerging node moving towards this new adoption. We used to use telephone lines to connect to the internet and we utilized that expertise to reach newer technologies and invent Wi-Fi later on. In hindsight, old technologies look redundant, but they were essential to reach the level we are at now.”

Conventional banks are becoming that “old technology” today and are being used to pour out funds into cryptocurrencies. Money is leaving the central banks and getting logged into the crypto ecosystem and revolving there.

“Eventually, all the money may evolve into crypto and banks may become irrelevant if they don’t find ways to adapt somehow,” Akhtar said.

FIAT money is what crypto uses for exchange. It is money that isn’t backed by a commodity such as gold or silver. Its value exclusively stems from the total trust that individuals place in it. It becomes the new collective illusion of where the new value lies.

While commodity-based money has always urged central banks to print and hold paper money as they wish to gain control, the value of FIAT money is stable.

What is different about FIAT is that its transactions are public. It means that people can control their own assets and how their money rotates and thus eliminate the mediator, banks. Furthermore, the government is being challenged by the cryptosystem because it hands control to the people, an imposed democracy through transparency that becomes incapable of controlling people’s lives by their assets.

“If you send one Ethereum to any of your friends, for example, the hash rate will be publicly seen. A publicly open display ledger brings lots of problems to the central banks who are trying to control people’s assets,” Akhtar said.

So how can people start investing?

People can get in through a regulated crypto exchange where they go through an entire KYC (Know your customer) process. That includes assessing the ID, document verification, and other customer identification procedures.

“The procedure takes around 5 hours on our platform CoinMENA, and then they’re up and running. There are many platforms like Kraken and Binance. However, they aren’t active in the Middle East where one can put in money but can’t retrieve their FIAT money, thus limiting the rotation of the money,” Akhtar said.

Today, there are two regulated exchanges in the whole GCC, both in Bahrain. One of them is CoinMENA, and the other is Rain. Bahrain has taken a big gamble by regulating cryptocurrencies to the central banks.

Platforms like CoinMENA throve on the demand of high net-worth individuals hungry to invest in cryptocurrencies through a regulated source. It currently operates in KSA, Oman, Kuwait, and UAE. People can buy one of the ten listed cryptocurrencies (Bitcoin, Ethereum, Ripple…) and sell the coins, liquidate them into fiat, then withdraw the money as paper from their bank accounts.

“A decade later, this reorganization of global wealth may bring hyperinflation in the world. People who are left out of the crypto trade or those who didn’t ride the wave early on may suffer a massive depreciation on their assets, so I believe it is a do-or-die situation. We are currently 30 people in CoinMENA. Five of us are receiving our salaries fully in cryptocurrencies. This is how things are evolving,” Akhtar said.

The more confidence people have in cryptocurrencies and the more value they allocate to them, the more money they will pump in it, thus boosting their value. With digital value being born, the rise of digital creation may only be starting.